Practise calculating Class 1 employee National Insurance using 2026/27 thresholds and rates.
What is the annual Class 1 employee National Insurance on a gross salary of £28,000?2026/27 rates. Standard employee. No contracted-out pension.
Answers accepted within £1
National Insurance (NI) is a compulsory contribution deducted from employees' pay alongside Income Tax. Unlike Income Tax, NI contributions build entitlement to state benefits including the State Pension, Statutory Sick Pay, and Maternity Pay. You need at least 35 qualifying years of NI contributions (or credits) for a full new State Pension.
For 2026/27, Class 1 employee NI works as follows: there is no NI on earnings up to the Primary Threshold (PT) of £12,570 per year. Between £12,570 and the Upper Earnings Limit (UEL) of £50,270, NI is charged at 8% — the main rate. Above £50,270, NI drops to just 2% — the upper rate. This means high earners pay a lower effective NI rate on their total earnings than those earning around £30,000–£50,000.
This drill generates random annual salaries and asks you to calculate the total employee NI by working through the two bands. An expandable rate table is shown for reference, and after answering you can see the exact calculation broken down band by band.
Note that NI thresholds are weekly in practice (PAYE is calculated per pay period), but for simplicity this drill uses annual figures. The annual Primary Threshold of £12,570 equals a weekly threshold of £242.
Employer NI is separate and not covered here: employers pay 15% on all earnings above £5,000 per year per employee (from April 2025), which is a significant additional payroll cost. Self-employed workers pay Class 4 NI at 6% (2026/27) on profits between £12,570 and £50,270, and 2% above. Class 2 NI was abolished for most self-employed workers from April 2024.
NI is not payable on employer pension contributions, which is one reason salary sacrifice pension arrangements can benefit both employer and employee.
0% on earnings up to £12,570 (Primary Threshold). 8% on earnings from £12,570 to £50,270. 2% on earnings above £50,270 (Upper Earnings Limit).
NI builds entitlement to state benefits (State Pension, statutory payments) whereas Income Tax does not. They have different rates, thresholds and rules, and are calculated separately — though both are deducted via PAYE.
The 2% upper rate above the Upper Earnings Limit has existed since 1985. The argument for the lower rate is that benefit entitlements (especially State Pension) do not increase above the UEL, so it is seen as less justified to charge the full rate on higher earnings.
No — but if your earnings are between £6,396 (Lower Earnings Limit) and £12,570 (Primary Threshold), you are treated as paying Class 1 NI at zero rate, which still earns you State Pension qualifying years without any actual deduction.
35 qualifying years for the full new State Pension (£221.20 per week in 2024/25). You need at least 10 qualifying years to get any State Pension at all.
Employers pay 15% NI on all employee earnings above £5,000 per year (from April 2025). This is separate from the employee's contribution and represents an additional cost of employment.
Self-employed people pay Class 4 NI on annual profits: 6% between £12,570 and £50,270, and 2% above £50,270 (2026/27 rates). Class 2 was abolished for most self-employed from April 2024.
Yes — salary sacrifice (e.g. for pension or cycle-to-work) reduces your gross pay before NI is calculated. Both you and your employer pay less NI, making salary sacrifice pension arrangements tax-efficient for both parties.
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