National Insurance is a contribution paid on earnings and self-employed profits by employees, employers and the self-employed. It builds entitlement to the State Pension and some benefits, and is paid in different classes depending on how you work.
The classes
| Class | Who pays | How it is collected |
|---|---|---|
| Class 1 | Employees, and their employers, on wages | Through payroll (PAYE) |
| Class 1A and 1B | Employers, on benefits in kind | After the tax year, by the employer |
| Class 2 | Self-employed people with low profits, voluntarily | Through Self Assessment |
| Class 3 | Anyone filling a gap in their record, voluntarily | Paid directly to HMRC |
| Class 4 | Self-employed people, on profits | Through Self Assessment |
If you are self-employed
Class 4 is charged at 6% on profits between £12,570 and £50,270, and 2% on profits above that. It is worked out on your Self Assessment return and paid with your Income Tax, including in your payments on account.
Since 6 April 2024 self-employed people no longer have to pay Class 2. If your profits are above the small profits threshold you are treated as having paid it, so the year still counts towards your State Pension. Below that, you can pay it voluntarily to protect your record.
Read more: Your Self Assessment calculation.