Answers · UK 2025/26

How does Class 4 National Insurance work for the self-employed in 2026/27?

Class 4 National Insurance is charged on self-employed profits at 6% between £12,570 and £50,270, and 2% on profits above £50,270 in 2026/27. It is calculated and paid through Self Assessment alongside Income Tax, and is separate from the flat-rate Class 2 contribution.

Last updated: 1 July 2026Last reviewed: 1 July 2026How we verify

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Class 4 National Insurance is the profit-based NI contribution paid by self-employed sole traders and partners on their trading profits, broadly equivalent to employee Class 1 NI on wages. **2026/27 rates and thresholds** - No Class 4 NI on profits up to £12,570 (the Lower Profits Limit, aligned with the Personal Allowance) - **6%** on profits between £12,570 and £50,270 - **2%** on profits above £50,270 **Worked example: profits of £45,000** - Profits within the 6% band: £45,000 - £12,570 = £32,430 - Class 4 NI: £32,430 x 6% = **£1,945.80** **Worked example: profits of £70,000** - 6% band: (£50,270 - £12,570) x 6% = £2,262 - 2% band: (£70,000 - £50,270) x 2% = £394.60 - Total Class 4 NI: **£2,656.60** **How it interacts with Income Tax** Class 4 NI is calculated on the same trading profit figure used for Income Tax, but it is a separate charge with its own bands. Both are worked out together on your Self Assessment return and paid by the same 31 January deadline (plus any payments on account due). **Who is exempt** You do not pay Class 4 NI if you are: under 16 at the start of the tax year, over State Pension age at the start of the tax year (even if you are still working), or your profits are below the Lower Profits Limit (£12,570). **Class 4 vs Class 2** Class 2 is a flat weekly amount (£3.65/week in 2026/27, now automatically credited above £7,105 profit rather than paid) that builds your State Pension qualifying years. Class 4 is a percentage of profit and, unlike Class 1 employee NI, does not itself count towards State Pension entitlement -- it is purely a revenue-raising charge on self-employed profits above the threshold. This is a key structural point often missed: paying more Class 4 NI does not buy you a better pension, only Class 2 (or Class 3 voluntary) contributions do that. **Combined tax and NI on self-employed profit** For a basic-rate self-employed person, the combined marginal rate on profit between £12,570 and £50,270 is 20% Income Tax + 6% Class 4 NI = 26%. Above £50,270, it becomes 40% Income Tax + 2% Class 4 NI = 42% -- both noticeably lower than the equivalent combined rate for employees once employer NI is factored in, which is one reason self-employment and limited company structures remain tax-attractive compared with employment for similar income levels.