What is National Insurance?
National Insurance (NI) is a tax on your earnings that funds the State Pension, NHS, and certain benefits. Unlike Income Tax, NI contributions build up your entitlement to these benefits.
Most employees pay Class 1 NI through PAYE, while self-employed people pay Class 2 and Class 4 through Self Assessment. Employers also pay NI on top of your wages.
National Insurance Classes
| Class | Who Pays | Rate |
|---|---|---|
| Class 1 | Employees | 8% (£12,570-£50,270), 2% above |
| Class 1A/1B | Employers | 13.8% |
| Class 2 | Self-employed | £3.45/week |
| Class 3 | Voluntary | £17.45/week |
| Class 4 | Self-employed | 6% (£12,570-£50,270), 2% above |
NI Thresholds 2025/26
Lower Earnings Limit (LEL)
Start building NI record
Primary Threshold (PT)
Start paying employee NI
Secondary Threshold (ST)
Employer starts paying NI
Upper Earnings Limit (UEL)
Rate drops to 2%
What Your NI Contributions Pay For
State Pension
Need 35 qualifying years for full amount (£221.20/week in 2025/26)
Jobseeker's Allowance
Contribution-based JSA if you lose your job
Employment Support Allowance
If you're unable to work due to illness
Maternity Allowance
If you don't qualify for Statutory Maternity Pay
Bereavement Benefits
Support if your spouse or civil partner dies
Employee vs Employer NI
Employee NI (Class 1)
- 8% on earnings £12,570-£50,270
- 2% on earnings over £50,270
- Deducted from your wages via PAYE
- Builds your NI record for benefits
Employer NI (Class 1)
- 13.8% on earnings over £9,100
- Paid on top of your salary
- Hidden cost - you don't see it on payslip
- Why salary sacrifice saves money
Related Calculators
Related Glossary Terms
Frequently Asked Questions
Calculate Your NI Contributions
Use our free calculator to see exactly how much National Insurance you'll pay and how much your employer contributes.