Class 4 National Insurance for Self-Employed UK 2026/27: Rates and How to Calculate

If you are self-employed in the UK, National Insurance works differently from employment. As of 2026/27, Class 4 NI is the main contribution you pay on your profits -- and Class 2 NI, which was a flat weekly charge, was abolished from April 2024. Here is everything you need to know to calculate your liability accurately.

What Happened to Class 2 NI?

Until April 2024, self-employed people paid two types of NI: Class 2 (a flat GBP 3.45/week) and Class 4 (a percentage of profits). Class 2 was scrapped entirely from the 2024/25 tax year onward, simplifying the system considerably.

Your State Pension entitlement is now protected through Class 3 voluntary contributions if you have gaps -- but most self-employed people earning above the Lower Profits Limit will continue to build qualifying years automatically through Class 4 credits.

Class 4 NI Rates 2026/27

The rates for 2026/27 are as follows:

• 6% on profits between GBP 12,570 (Lower Profits Limit) and GBP 50,270 (Upper Profits Limit)
• 2% on profits above GBP 50,270

Note that the Lower Profits Limit matches the Personal Allowance at GBP 12,570. This alignment means you start paying Class 4 NI at roughly the same point you start paying income tax, making calculations more straightforward.

How to Calculate Your Class 4 NI

The formula is simple once you know your taxable profit for the year.

Step 1: Subtract GBP 12,570 from your profits to find the amount subject to 6% NI.

Step 2: If profits exceed GBP 50,270, calculate 2% on the excess.

Step 3: Add the two figures together.

Example 1: Profits of GBP 30,000

• GBP 30,000 minus GBP 12,570 = GBP 17,430 at 6%
• Class 4 NI = GBP 17,430 x 0.06 = GBP 1,045.80

Example 2: Profits of GBP 50,000

• GBP 50,000 minus GBP 12,570 = GBP 37,430 at 6%
• Class 4 NI = GBP 37,430 x 0.06 = GBP 2,245.80
• No profits above GBP 50,270, so total = GBP 2,245.80

Example 3: Profits of GBP 70,000

• Band 1: GBP 50,270 minus GBP 12,570 = GBP 37,700 at 6% = GBP 2,262
• Band 2: GBP 70,000 minus GBP 50,270 = GBP 19,730 at 2% = GBP 394.60
• Total Class 4 NI = GBP 2,656.60

Class 4 NI and Income Tax Together

Self-employed people pay both income tax and Class 4 NI on their profits. The combined burden at different profit levels is worth understanding:

These figures assume no other income sources and standard allowances only.

Paying Your Class 4 NI

Class 4 NI is collected through Self Assessment, not separately. When you file your tax return for 2026/27, HMRC calculates both income tax and Class 4 NI together. Payment deadlines are:

• 31 January 2027: balancing payment for 2025/26 + first payment on account for 2026/27
• 31 July 2027: second payment on account for 2026/27

Payments on account are 50% of your previous year's total liability, which can catch new self-employed people off guard in their first year.

Allowable Expenses Reduce Your NI Bill

Your Class 4 NI is based on taxable profit, not turnover. This means allowable business expenses reduce both your income tax and your NI liability simultaneously. Common deductions include:

• Office costs, phone and broadband
• Professional subscriptions and insurance
• Mileage at HMRC approved rates (45p/mile for the first 10,000 miles, 25p/mile above)
• Equipment and tools (potentially using Annual Investment Allowance up to GBP 1,000,000)
• Accountancy fees

Pension Contributions Also Reduce Your Liability

Personal pension contributions made to a registered pension scheme reduce your adjusted net income for income tax but do not reduce your Class 4 NI base -- Class 4 is calculated on trading profit before pension relief. However, if you contribute through a SIPP, you still get tax relief at your marginal rate, which is a meaningful saving at higher profit levels.

Sole Trader vs Limited Company: NI Comparison

At higher profit levels, many self-employed people consider incorporating. A limited company director typically takes a low salary (often GBP 12,570 or GBP 5,000 to minimise NI) and extracts remaining profit as dividends. Dividends are not subject to NI at all. At profits above GBP 50,000, the NI saving from incorporation can be several thousand pounds per year -- though Corporation Tax, accountancy costs and reduced flexibility must also be factored in.

Do Self-Employed People Pay Employer NI?

No. The 15% employer NI rate (above the secondary threshold of GBP 5,000) applies only to employers paying wages. As a sole trader, you are not paying yourself a salary in the legal sense, so employer NI does not apply to your own drawings.

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Use the CalcHub Self-Employed Tax Calculator to calculate your exact Class 4 NI and income tax for 2026/27 based on your profit level.