Glossary · UK
What is Class 4 National Insurance?
National Insurance paid by self-employed people on profits above the lower threshold, at 6% then 2%.
Full Definition
Class 4 National Insurance is paid by self-employed individuals on their annual taxable profits. For 2026/27, you pay 6% on profits between GBP 12,570 and GBP 50,270, and 2% on profits above GBP 50,270. It is calculated through Self Assessment alongside your Income Tax and collected at the same time, including via Payments on Account. Class 4 contributions are based on profit, not turnover, so allowable expenses and reliefs reduce the amount due. Unlike Class 1, Class 4 does not on its own build entitlement to all contributory benefits, though the structure has changed in recent years. Profits below GBP 12,570 incur no Class 4 NI. Partners in a partnership pay Class 4 on their share of profits. Confirm thresholds and rates on gov.uk before filing.
How Class 4 National Insurance is calculated
class4 = (min(profit, 50270) - 12570) x 0.06 + max(0, profit - 50270) x 0.02- profit
- Annual taxable self-employment profit
Worked example: Profit GBP 40,000: class4 = (40,000 - 12,570) x 0.06 = 27,430 x 0.06 = GBP 1,645.80.