Pillar Guide · Updated May 2026

National Insurance Contributions 2026/27: All Classes, Rates and How to Protect Your Record

National Insurance is a tax on earnings that funds the State Pension, the NHS, Jobseeker's Allowance and other contributory benefits. In 2026/27 employees pay 8% on earnings between £12,570 and £50,270, while employers pay 15% above £5,000. Self-employed people pay 6%Class 4 NI. You need 35 qualifying years for the full State Pension — this guide explains every class, how to check your record, and how to fill gaps before they cost you thousands in lost pension.

Last updated: 26 May 2026Last reviewed: 26 May 2026How we verify

What Is National Insurance?

National Insurance (NI) is a compulsory contribution paid by employees, employers and the self-employed. Unlike income tax (which funds general government spending), NI is nominally hypothecated to specific benefits: the State Pension, NHS services, Jobseeker's Allowance (contribution-based), Employment and Support Allowance and bereavement benefits.

The key difference from income tax: NI is assessed on earnings, not on total income. Interest from savings, dividends, rental income and pensions are not subject to NI — only employed earnings (Class 1) and self-employed profits (Class 2 and 4) count. This distinction creates planning opportunities for business owners who can choose the balance between salary (which attracts NI) and dividends (which do not).

Your NI record determines your entitlement to the State Pension (35 qualifying years for the full £230.25/wk in 2026/27) and certain other benefits. Building and protecting your NI record is therefore as important as the amount you pay.

All NI Classes at a Glance

Class	Who pays	Rate 2026/27	State Pension credit?
Class 1 Employee	Employees on earnings	8% on £12,570–£50,270; 2% above	Yes
Class 1 Employer (secondary)	Employers on payroll	15% above £5,000/yr	No
Class 1A	Employers on benefits-in-kind	15% on taxable BIK value	No
Class 1B	Employers on PSAs	15% on value of PSA items	No
Class 2 (voluntary, abolished mandatory)	Self-employed voluntarily	£3.45/wk voluntary	Yes
Class 3 Voluntary	Individuals filling gaps	£17.45/wk	Yes
Class 4	Self-employed on profits	6% on £12,570–£50,270; 2% above	Yes (from 2024)

Class 1 Employee NI

Employees pay Class 1 NI on their earnings above the Primary Threshold:

Lower Earnings Limit (LEL): £6,396/yr — earnings above this give a notional NI credit towards State Pension even if no NI is actually paid
Primary Threshold: £12,570/yr — NI is due at 8% on earnings above this
Upper Earnings Limit (UEL): £50,270/yr — NI drops to 2% on earnings above this

Earnings band	Employee NI rate
Below £6,396/yr	0% (no qualifying credit below LEL)
£6,396–£12,570/yr	0% (but qualifying NI credit earned)
£12,570–£50,270/yr	8%
Above £50,270/yr	2%

Employee NI is deducted by the employer through PAYE and paid directly to HMRC. The NI year for employed people runs weekly or monthly depending on the pay period — an employee earning above the LEL in each pay period accumulates qualifying weeks and thus a qualifying year for State Pension purposes.

Class 1 Employer NI

Employers pay secondary Class 1 NI at 15%on each employee's earnings above the Secondary Threshold. The October 2024 Budget raised this rate from 13.8% to 15% and simultaneously reduced the Secondary Threshold from £9,100 to £5,000 per year — both changes took effect from 6 April 2025.

The Employment Allowance (£10,500 from April 2025) allows eligible small employers to reduce their employer NI bill. Employers with an employer NI liability below £100,000 in the prior year can claim this offset via their payroll software. Many small business owners can eliminate their employer NI bill entirely using the Employment Allowance.

Employer NI does not contribute to the employee's State Pension record — it goes into general Exchequer receipts. However, it is a significant cost to employers: on a £40,000 salary, the employer pays approximately £5,250 in NI, making the true employment cost around £45,250.

Class 1A and 1B

Class 1A NI is paid by employers only (not employees) on taxable benefits in kind — company cars, private medical insurance, gym memberships, and other non-cash perks reported on P11D forms. The rate is 15%(from April 2025) on the P11D value. Class 1A is paid annually (by 22 July electronically following the end of the tax year) via a P11D(b) return.

Class 1B NI is paid by employers who operate a PAYE Settlement Agreement (PSA) — an arrangement where the employer settles the income tax and NI liability on minor or irregular benefits (such as staff entertainment, small gifts, or incentive awards) on behalf of employees. Class 1B is calculated on the grossed-up value of the benefits covered under the PSA.

Class 2 and Class 4: Self-Employed

Self-employed NI changed significantly from April 2024:

Class 2 (mandatory) abolished April 2024: Previously £3.45/wk for profits above the Small Profits Threshold (£12,570). Now abolished as a mandatory contribution. However, voluntary Class 2 at £3.45/wk remains available for those with small profits who want to maintain their State Pension record cheaply.
Class 4: Remains mandatory — paid via Self Assessment. Rate: 6% on profits between £12,570 and £50,270; 2% on profits above £50,270. Class 4 contributions now count towards qualifying years for State Pension (this is new from April 2024 — previously only Class 2 built qualifying years for the self-employed).

Self-employed people with profits below £12,570 have a gap: they do not pay Class 4 NI and therefore do not automatically build qualifying NI years. They can pay voluntary Class 2 (£3.45/wk) or Class 3 (£17.45/wk) to maintain their record — Class 2 is far cheaper if they qualify.

Class 3 Voluntary NI

Class 3 voluntary NI contributions allow anyone with gaps in their NI record to fill them and build qualifying years towards the State Pension. In 2026/27:

Class 3 costs and returns 2026/27

Weekly rate: £17.45
Annual cost per gap year: £907.40 (52 × £17.45)
State Pension gain per qualifying year: £6.58/wk = £342/yr (£230.25 ÷ 35)
Break-even: £907.40 ÷ £342 = approximately 2.65 years

You can normally fill gaps going back 6 tax years (to 2020/21 in 2026/27). The special extension to 2006/07 closed on 5 April 2025. Always check your NI record before paying — if you already have 35+ qualifying years, additional payments are wasted.

NI Credits

NI credits allow you to build qualifying years without making actual contributions. The most important credits in 2026/27:

Credit type	Who gets it	Action needed?
Child Benefit credits	Parent claiming CB for child under 12	Claim CB even if you opt out of payment
Specified Adult Childcare credit	Grandparent/carer providing childcare	Apply using form CA9176
Carer's Credit	Providing 20+ hrs/wk unpaid care	Apply via gov.uk/carers-credit
JSA credits	Claiming contribution-based JSA	Automatic
ESA credits	Claiming contribution-based ESA	Automatic
UC credits	On UC with LCW/LCWRA	Automatic while on UC
Home Responsibilities Protection	Pre-2010 credits for carers	May be on your record already

Director NI Calculation

Company directors face a different NI calculation method: an annual earnings period rather than the normal weekly or monthly period. This means NI is calculated on cumulative salary over the full tax year, not on each payroll run independently.

A common director strategy: pay a regular monthly salary just above the Lower Earnings Limit (approximately £533/mo = £6,396/yr) to build qualifying NI years for State Pension purposes at zero or minimal NI cost. Then take the remainder of remuneration as dividends (which do not attract NI). This eliminates employer NI (since the salary falls below the £5,000 Secondary Threshold) and keeps employee NI at zero (salary is below the £12,570 Primary Threshold).

Since April 2025, the employer Secondary Threshold fell to £5,000/yr — directors who previously paid themselves £9,100 (the old Secondary Threshold) may need to review their salary strategy, as the Employment Allowance can offset some or all of the resulting employer NI if their company qualifies.

Checking and Filling Your NI Record

To check your NI record: go to gov.uk/check-national-insurance-recordand log in with your Government Gateway or HMRC One Login credentials. The service shows each tax year back to 2006/07, your State Pension forecast, and the cost of filling each gap year.

Before filling any gaps, ask yourself:

Do I already have 35+ qualifying years? If so, filling more gaps adds nothing.
Will I reach 35 years naturally by State Pension age through continued work?
Do I qualify for cheaper Class 2 contributions for any of the gap years?
Are any credits I should have received missing from my record?
Am I likely to receive Pension Credit? If so, extra State Pension may not increase total income.

To pay Class 3 contributions for gap years, contact HMRC (0300 200 3500) or use the online NI record service to confirm the amount due and receive payment instructions. Do not pay without first getting written confirmation of the amount for each specific gap year.

Worked Example

David, age 45, checks his NI record and finds 3 qualifying years missing (2017/18, 2018/19, 2019/20)

Cost to fill 3 gaps

3 × £907.40 (Class 3) = £2,722.20
Or 3 × £179.40 (Class 2, if self-employed those years) = £538.20
David was employed 2017–2020, so Class 3 applies

State Pension gain

3 extra qualifying years × £6.58/wk = £19.74/wk extra
Annual gain: £19.74 × 52 = £1,026/yr

Break-even from State Pension age (67)

£2,722.20 ÷ £1,026 = 2.65 years
If David lives to 85 (18 years of pension): total gain = 18 × £1,026 = £18,468
Net of cost: £18,468 − £2,722 = £15,746 net gain

David confirms the 3 gaps are within the 6-year window (2020/21 is the earliest accessible in 2026/27). He contacts HMRC to get the exact amounts and pays Class 3.

Frequently asked questions

How many qualifying NI years do I need for the full State Pension?

You need 35 qualifying National Insurance years to receive the full new State Pension of £230.25 per week in 2026/27 (uprated from £221.20 in 2025/26 via the triple-lock mechanism). You need a minimum of 10 qualifying years to receive any State Pension at all. Each qualifying year adds approximately £6.58 per week (£230.25 ÷ 35) to your State Pension entitlement. If you have fewer than 35 years, your pension is proportionate — for example, 25 qualifying years gives you 25/35 × £230.25 = £164.46 per week.

Can I check my National Insurance record online?

Yes — you can view your NI record at gov.uk/check-national-insurance-record using your Government Gateway or HMRC One Login account. The service shows every tax year from 2006/07 onwards, marking each as "full", "partial" or "gap". It also shows your current State Pension forecast, the maximum you could receive, your State Pension age, and the cost of filling each available gap year. The information is usually updated a few months after the end of each tax year. If you prefer not to use the online service, contact the Future Pension Centre (0800 731 0181) to request a paper State Pension statement.

How do I fill gaps in my NI record?

To fill gaps in your NI record, pay voluntary Class 3 NI contributions. In 2026/27, Class 3 costs £17.45 per week (£907.40 per gap year). You can normally only fill gaps going back 6 tax years — so in 2026/27, the earliest fillable year is 2020/21. The special government extension allowing back-filling to 2006/07 closed on 5 April 2025. Before paying, check whether you qualify for the cheaper Class 2 rate (£3.45/wk), which is available to people who were self-employed during the gap year and had small profits. Contact HMRC on 0300 200 3500 to confirm which class applies to each gap before making payment.

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What happened to Class 2 NI contributions after April 2024?

From 6 April 2024, mandatory Class 2 NI contributions (previously £3.45/wk for self-employed people with profits above the Small Profits Threshold) were abolished. Self-employed people now pay only Class 4 NI (6% on profits between £12,570 and £50,270, 2% above that in 2026/27). Critically, Class 4 contributions still count towards the State Pension — this is sometimes misunderstood. Self-employed people with profits above £12,570 continue to build qualifying NI years through their Class 4 payments. Those with profits below £12,570 who wish to protect their State Pension record can still pay voluntary Class 2 contributions (£3.45/wk) or Class 3 contributions (£17.45/wk).

What NI credits are available for carers?

Several NI credits are available for people with caring responsibilities. The most important are: (1) Child Benefit credits — if you are the claiming parent of a child under 12, you receive NI credits automatically, even if you opt out of payment due to the HICBC. Always claim and immediately opt out rather than not claiming. (2) Carer's Credit — if you provide at least 20 hours per week of unpaid care for someone receiving a qualifying disability benefit (such as PIP daily living, DLA care component, or Attendance Allowance), you can apply for Carer's Credit via gov.uk/carers-credit. (3) Specified Adult Childcare credits — if you are a grandparent or other family member providing childcare while the child's parent works, you can apply to have credits transferred from the Child Benefit claimant to you (form CA9176).

How does employed NI compare with self-employed NI in 2026/27?

An employee earning £40,000 pays Class 1 employee NI: 8% on earnings between £12,570 and £40,000 = £2,194/yr. Their employer also pays Class 1 employer NI: 15% on earnings above £5,000 = £5,250/yr (post-April 2025 rate). Total NI on a £40,000 salary: £7,444/yr. A self-employed person with £40,000 profits pays Class 4 NI only: 6% on profits £12,570–£40,000 = £1,636/yr, plus 2% on profits above £50,270 (not applicable here). Total: £1,636/yr. The self-employed save significantly on NI, but do not benefit from employer contributions, statutory employment benefits, or Statutory Sick Pay. They also need to save separately for tax via payments on account.

How is NI calculated for company directors?

Company directors are generally treated as employees for NI purposes but use an annual earnings period rather than a weekly or monthly one. This means NI is calculated on the cumulative salary over the full tax year, not period by period. A practical consequence: if a director takes a large salary in April (the first month of the tax year) that exceeds the annual Primary Threshold (£12,570), NI applies from that first payment — unlike employees who benefit from spreading salary across 12 months. Many directors are advised to take a small regular salary (just above the NI Lower Earnings Limit, around £6,396) to maintain qualifying NI years at zero or minimal cost, and to take the balance as dividends (which do not attract NI).

What NI applies to benefits in kind?

Benefits in kind (non-cash perks like company cars, private healthcare, gym memberships) provided by employers are subject to Class 1A National Insurance. Class 1A is paid by the employer only (not the employee) at 15% (from April 2025) on the taxable value of benefits, reported and paid annually via form P11D and P11D(b) by 6 July following the end of the tax year. The employee pays income tax on the benefit-in-kind value through their PAYE tax code but pays no NI themselves. Some benefits are exempt from NI (and income tax) — notably employer pension contributions, childcare vouchers (legacy schemes), employer-provided Cycle to Work schemes, and working-from-home payments within HMRC limits.

Does salary sacrifice for pension affect my NI contributions?

Yes — salary sacrifice pension contributions reduce your gross earnings for NI purposes, not just income tax. If you exchange £5,000 of salary for an employer pension contribution via salary sacrifice, you pay NI on £5,000 less salary. At 8% employee NI rate, this saves the employee £400 in NI. The employer also saves 15% employer NI (£750) on the sacrificed amount — and many employers pass some or all of this saving back into the employee's pension as an additional contribution. Salary sacrifice is the most efficient way to make pension contributions precisely because it reduces NI as well as income tax, unlike personal pension contributions made outside of payroll.

Do I still pay NI after reaching State Pension age?

No — once you reach State Pension age (currently 66), you stop paying Class 1 NI as an employee, Class 2 NI as self-employed, and Class 4 NI on self-employed profits. You do not need to do anything — your employer should automatically stop deducting Class 1 employee NI from your pay once HMRC updates your tax code. If your employer continues to deduct NI in error after your State Pension age, you can claim a refund. Note that employer NI (Class 1 secondary) continues to be paid by your employer on your earnings even after you reach State Pension age — only the employee contribution stops. If you are self-employed and still working, make sure your SA return reflects the cessation of Class 4 liability from the year you reach SPA.

Related Guides

State Pension Qualifying Years

35 NI years, gap filling and break-even analysis

National Insurance Explained

Overview of how NI works

Salary Sacrifice

Reduce NI through salary sacrifice pensions

Employment Allowance

£10,500 NI offset for small employers

Useful tools

National Insurance calculator State Pension calculator Take-home pay calculator

About the author

Emma Clarke

UK Tax Writer

Emma Clarke has been writing about UK personal tax since 2018, with a particular focus on Self Assessment, PAYE coding and the practical mechanics of how HMRC actually applies the rules to ordinary salaries. Her work concentrates on translating the dense language of HMRC manuals and Finance Act schedules into worked examples that show, pound by pound, how income tax and National Insurance reduce a gross salary to the figure that lands in a UK bank account. Emma covers the full PAYE lifecycle: tax codes (1257L, BR, K codes, emergency codes), the Marriage Allowance, the High Income Child Benefit Charge, salary sacrifice arrangements and their effect on pensionable pay, the Apprenticeship Levy, and the differences between the rUK and Scottish income-tax regimes. She is particularly interested in the edge cases that catch PAYE employees out — the £100,000 personal-allowance taper, the 60% effective marginal rate it creates, and the interaction between student-loan plans and pension contributions. Every figure in Emma's articles is verified against the current HMRC rates pages and worked through a Self Assessment calculation by hand before publication. She writes to CalcHub's editorial standards: primary-source citations, plain English, no promotional language, and clear "this is general information, not financial advice" disclaimers where appropriate.

Personal-finance writer since 2018
UK tax specialism — PAYE, Self Assessment, National Insurance
Writes to CalcHub editorial standards (primary-source citation, annual review)

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Disclaimer: NI rates and thresholds change annually. This guide reflects the 2026/27 position as at May 2026. The abolition of mandatory Class 2 NI took effect from April 2024. Always verify your NI record at gov.uk/check-national-insurance-record and contact HMRC before making any voluntary contribution payments to confirm the exact amount due for each gap year.