UK National Insurance Rates 2025/26: Complete Guide with Calculator

UK National Insurance for 2025/26 saw significant employer changes in April 2025 but employee rates remained unchanged. Employees pay 8% on earnings between £12,570-£50,270, then 2% above £50,270 - identical to 2024/25. However, employer NI increased from 13.8% to 15% and the threshold dropped from £9,100 to £5,000, substantially raising business costs.

The Employment Allowance doubled from £5,000 to £10,500 to offset small business impacts. For self-employed workers, Class 2 NI (£3.50/week) is now voluntary only - you receive automatic National Insurance credits if profits exceed £6,845, eliminating mandatory contributions for most sole traders.

This comprehensive guide covers all National Insurance rates, thresholds, and calculations for 2025/26, including the April 2025 changes affecting employers and self-employed individuals.

Employee National Insurance (Class 1) - 2025/26

Employee NI rates remain unchanged from 2024/25 after cuts in January 2024 (10% to 8%).

Employee NI Rates

Income Band	Rate	Annual Threshold
£0 - £12,570	0%	Below primary threshold
£12,571 - £50,270	8%	Main NI rate
£50,270+	2%	Higher earners rate

Primary threshold: £12,570 (matches personal allowance for income tax)

Upper earnings limit: £50,270 (matches higher rate tax threshold)

Key point: NI thresholds are frozen until 2031 (extended from 2028), creating fiscal drag as wages rise with inflation.

Employee NI Calculation Examples

Example 1: £25,000 salary

• First £12,570: £0 (no NI)
• Remaining £12,430 × 8% = £994.40 annual NI
• Monthly: £82.87

Example 2: £45,000 salary

• First £12,570: £0
• £12,571-£45,000: £32,429 × 8% = £2,594.32 annual NI
• Monthly: £216.19

Example 3: £60,000 salary

• First £12,570: £0
• £12,571-£50,270: £37,699 × 8% = £3,015.92
• £50,271-£60,000: £9,729 × 2% = £194.58
• Total annual NI: £3,210.50
• Monthly: £267.54

Example 4: £100,000 salary

• First £12,570: £0
• £12,571-£50,270: £37,699 × 8% = £3,015.92
• £50,271-£100,000: £49,729 × 2% = £994.58
• Total annual NI: £4,010.50
• Monthly: £334.21

Calculate Your Exact NI Contributions →

Employer National Insurance (Class 1) - Major Changes April 2025

Employer NI saw the most significant changes in the 2025/26 tax year, substantially increasing employment costs.

Employer NI Rates 2025/26

Previous rates (until 5 April 2025):

• Rate: 13.8% on earnings above £9,100
• Employment Allowance: £5,000

New rates (from 6 April 2025):

• Rate: 15% (increased from 13.8%)
• Threshold: £5,000 (reduced from £9,100)
• Employment Allowance: £10,500 (doubled from £5,000)

Impact on Employer Costs

Example 1: Employee earning £25,000

Before April 2025:

• Earnings above threshold: £25,000 - £9,100 = £15,900
• Employer NI: £15,900 × 13.8% = £2,194

After April 2025:

• Earnings above threshold: £25,000 - £5,000 = £20,000
• Employer NI: £20,000 × 15% = £3,000
• Increase: £806 per employee (36.8% higher!)

Example 2: Employee earning £45,000

Before April 2025:

• £45,000 - £9,100 = £35,900 × 13.8% = £4,954

After April 2025:

• £45,000 - £5,000 = £40,000 × 15% = £6,000
• Increase: £1,046 per employee (21.1% higher)

Example 3: Employee earning £60,000

Before April 2025:

• £60,000 - £9,100 = £50,900 × 13.8% = £7,024

After April 2025:

• £60,000 - £5,000 = £55,000 × 15% = £8,250
• Increase: £1,226 per employee (17.5% higher)

Employment Allowance: Small Business Relief

The Employment Allowance increased from £5,000 to £10,500 to offset the employer NI increases for small businesses.

Who qualifies:

• Businesses with employer NI bill below £100,000 (previous year)
• Not available to companies where sole employee is also director
• Applies to all eligible employment NI, not per employee

How it works:

• Reduces employer NI liability by up to £10,500/year
• Claimed through payroll software
• First £10,500 of employer NI is effectively free

Example: Small business with 3 employees (£25k, £30k, £35k)

Total employer NI (after April 2025 changes):

• £25k employee: (£25k - £5k) × 15% = £3,000
• £30k employee: (£30k - £5k) × 15% = £3,750
• £35k employee: (£35k - £5k) × 15% = £4,500
• Total: £11,250

After Employment Allowance:

• £11,250 - £10,500 = £750 actual NI cost
• Saving: £10,500 (93.3% reduction!)

Without Employment Allowance increase:

• Would pay: £11,250 - £5,000 = £6,250
• New allowance saves additional £5,500

Calculate Employment Costs with NI →

Self-Employed National Insurance (Class 2 & 4) - Changes April 2025

Class 2 NI: Now Voluntary Only (Major Change!)

Previous system (until 5 April 2025):

• Mandatory if profits ≥ £6,725/year
• Rate: £3.45/week (£179.40/year)

New system (from 6 April 2025):

• Class 2 NI is voluntary only
• Automatic NI credits if profits ≥ £6,845
• Rate if paying voluntarily: £3.50/week (£182/year)

What this means:

• Most self-employed no longer pay Class 2 NI
• Still receive full state pension credits automatically
• Can pay voluntarily to boost state pension entitlement
• Saves £182/year for most sole traders

Who should pay Class 2 voluntarily:

• Those with profits below £6,845 wanting state pension credits
• Those wanting to protect other NI-based benefits
• Those with gaps in NI record wanting qualifying years

Who doesn't need to pay:

• Self-employed with profits ≥ £6,845 (automatic credits)
• Those already with full 35 qualifying years for state pension
• Those claiming benefits that credit NI

Class 4 NI: Unchanged Rates

Self-employed individuals still pay Class 4 NI on profits:

Profit Band	Rate
£0 - £12,570	0%
£12,571 - £50,270	6%
£50,270+	2%

Thresholds: Match income tax and Class 1 NI (frozen until 2031)

Self-Employed NI Calculation Examples

Example 1: £25,000 profit

Class 2 (voluntary):

• £3.50/week = £182/year (optional - receive automatic credits anyway)

Class 4:

• First £12,570: £0
• Remaining £12,430 × 6% = £745.80
• Total Class 4: £745.80

Total NI if paying Class 2 voluntarily: £927.80 Total NI if not paying Class 2: £745.80 (most choose this)

Example 2: £45,000 profit

Class 2 (voluntary): £182/year (optional)

Class 4:

• First £12,570: £0
• £12,571-£45,000: £32,429 × 6% = £1,945.74
• Total Class 4: £1,945.74

Example 3: £60,000 profit

Class 2 (voluntary): £182/year (optional)

Class 4:

• First £12,570: £0
• £12,571-£50,270: £37,699 × 6% = £2,261.94
• £50,271-£60,000: £9,729 × 2% = £194.58
• Total Class 4: £2,456.52

Comparison: Employee vs Self-Employed NI on £60k

• Employee: £3,210.50
• Self-employed (Class 4 only): £2,456.52
• Self-employed saves: £753.98 (23.5% less!)

Calculate Self-Employed NI and Tax →

Combined Income Tax and National Insurance: Real Take-Home Pay

National Insurance combines with income tax to create total deductions.

£25,000 Salary: Complete Breakdown

Income tax:

• Taxable: £25,000 - £12,570 = £12,430
• Tax: £12,430 × 20% = £2,486

National Insurance:

• NI: £12,430 × 8% = £994.40

Total deductions: £3,480.40 Take-home pay: £21,519.60 (86.1% of gross)

£45,000 Salary: Complete Breakdown (England)

Income tax:

• Taxable: £45,000 - £12,570 = £32,430
• Tax: £32,430 × 20% = £6,486

National Insurance:

• NI: £32,429 × 8% = £2,594.32

Total deductions: £9,080.32 Take-home pay: £35,919.68 (79.8% of gross) Monthly take-home: £2,993.31

£60,000 Salary: Complete Breakdown (England)

Income tax:

• Basic: £37,699 × 20% = £7,539.80
• Higher: £9,729 × 40% = £3,891.60
• Total tax: £11,431.40

National Insurance:

• 8% band: £37,699 × 8% = £3,015.92
• 2% band: £9,729 × 2% = £194.58
• Total NI: £3,210.50

Total deductions: £14,641.90 Take-home pay: £45,358.10 (75.6% of gross) Monthly take-home: £3,779.84

£100,000 Salary: Complete Breakdown (England)

Income tax (including personal allowance withdrawal):

• Tax: £32,486.00 (see income tax guide for calculation)

National Insurance:

• 8% band: £37,699 × 8% = £3,015.92
• 2% band: £49,729 × 2% = £994.58
• Total NI: £4,010.50

Total deductions: £36,496.50 Take-home pay: £63,503.50 (63.5% of gross) Monthly take-home: £5,291.96

Effective total tax rate: 36.5% (combined income tax + NI)

Calculate Complete Tax and NI Breakdown →

Director's NI: Annual vs Monthly Calculation

Company directors can choose annual calculation method for more efficient NI.

Monthly Calculation (Default)

How it works:

• NI calculated each month independently
• Thresholds divided by 12
• Monthly primary threshold: £12,570 ÷ 12 = £1,047.50

Example: Director earning £60,000 (£5,000/month)

Monthly calculation:

• Each month: (£5,000 - £1,047.50) × 8% = £316.20
• 12 months: £316.20 × 12 = £3,794.40 annual NI

Annual Calculation (Director's Option)

How it works:

• NI calculated on cumulative annual earnings
• Applied to full year at end
• More efficient for irregular income

Example: Same £60,000 director (annual method)

Annual calculation:

• £12,571-£50,270: £37,699 × 8% = £3,015.92
• £50,271-£60,000: £9,729 × 2% = £194.58
• Total: £3,210.50

Saving vs monthly: £3,794.40 - £3,210.50 = £583.90

Why annual method saves:

• Monthly method doesn't carry forward unused threshold
• Annual method uses full thresholds efficiently
• Particularly beneficial with irregular director dividends/salary

Recommendation: Directors with variable income should elect annual NI calculation via payroll.

National Insurance Credits and State Pension

How NI Credits Work

Qualifying years for state pension:

• Need 35 qualifying years for full state pension (currently £221.20/week, £11,502/year)
• Minimum 10 qualifying years to receive anything

What counts as qualifying year:

• Earnings ≥ £6,845 (automatic credit - Class 1, 2, or 4)
• Receiving certain benefits (Universal Credit, JSA, ESA)
• Claiming child benefit (parent/guardian)
• Caring for someone ≥20 hours/week (Carer's Credit)

Automatic Credits 2025/26

Employees:

• Earning ≥ £6,845/year: Automatic NI credit (even if not paying NI)
• No action needed

Self-employed (NEW for 2025/26):

• Profits ≥ £6,845: Automatic NI credit
• No need to pay Class 2 NI (£182/year saving!)
• Previously had to pay Class 2 for credits

Unemployed/carers:

• Claim Universal Credit: Automatic credits
• Claim child benefit: Automatic credits (even if benefit not paid due to high income)
• Register for Carer's Allowance: Automatic credits

Voluntary NI Contributions

When to pay voluntarily:

• Gaps in NI record from working abroad
• Self-employed with profits below £6,845
• Years out of work without benefits/credits
• Expats wanting to maintain UK state pension

Cost 2025/26:

• Class 2: £3.50/week (£182/year) - cheapest option
• Class 3: £17.45/week (£907.40/year) - for those not eligible for Class 2

Return on investment:

• Each qualifying year adds £328/year to state pension (£11,502 ÷ 35)
• £182 Class 2 cost → £328/year increase = pays back in 7 months
• Over 20-year retirement: £182 cost → £6,560 return (36× return!)

Check your NI record: gov.uk/check-national-insurance-record

Calculate NI Impact on Pension →

Frequently Asked Questions

What are the National Insurance rates for 2025/26?

Employee NI (Class 1): 8% on £12,571-£50,270, then 2% on £50,270+. Employer NI: 15% on earnings above £5,000 (increased from 13.8% and £9,100 threshold in April 2025). Self-employed Class 4: 6% on £12,571-£50,270, then 2% on £50,270+. Class 2: £3.50/week but now voluntary only - automatic credits if profits ≥ £6,845.

How much NI do I pay on £45,000?

Employee earning £45,000 pays £2,594.32 annual NI (£216.19/month). Calculation: first £12,570 = £0, remaining £32,429 × 8% = £2,594.32. Combined with income tax of £6,486, total deductions are £9,080.32, giving take-home of £35,919.68 (79.8% of gross, £2,993/month).

What changed for employer NI in April 2025?

Employer NI rate increased from 13.8% to 15% and threshold dropped from £9,100 to £5,000. This significantly increased employment costs: employee on £25k now costs employer £3,000 in NI vs £2,194 previously (£806 increase). However, Employment Allowance doubled from £5,000 to £10,500 to help small businesses.

Do I still pay Class 2 NI as self-employed?

No, Class 2 NI (£3.50/week, £182/year) is now voluntary only from April 2025. If your profits are ≥ £6,845, you automatically receive National Insurance credits for state pension purposes without paying. You can pay voluntarily if profits are below £6,845 or you want to fill NI record gaps.

How does self-employed NI compare to employee NI?

Self-employed pay less NI. On £60,000: employee pays £3,210.50, self-employed pays £2,456.52 (Class 4 only) - saving £753.98. However, self-employed don't get employer pension contributions, sick pay, holiday pay, or other employment benefits. They also pay both employer and employee contributions if they incorporate.

What is the Employment Allowance?

Employment Allowance reduces employer NI liability by up to £10,500/year (doubled from £5,000 in April 2025). Available to businesses with previous year's employer NI below £100,000. Not available if sole employee is company director. Claimed automatically through payroll. Effectively makes first £10,500 of employer NI free.

Do National Insurance thresholds increase with inflation?

No. NI thresholds are frozen until 2031 (extended from 2028). Primary threshold stays at £12,570, upper earnings limit at £50,270. With 3.6% inflation (October 2025), real value erodes 3-4% annually. This "fiscal drag" means more people pay NI as wages rise with inflation, whilst thresholds stay frozen.

How do I check my NI record?

Visit gov.uk/check-national-insurance-record to see your NI contributions history, qualifying years for state pension, and any gaps. You need Government Gateway login (create if needed). Shows how many qualifying years you have (need 35 for full state pension) and options to fill gaps with voluntary contributions.

What's the difference between Class 1, 2, and 4 NI?

Class 1: Employee and employer NI on salary/wages. Class 2: Self-employed flat rate (now voluntary, £3.50/week). Class 4: Self-employed profit-based NI (6% then 2%). Class 1A/1B: Employer NI on benefits and PAYE Settlement Agreements. Class 3: Voluntary contributions to fill gaps (£17.45/week).

Can I get a refund if I overpay NI?

Yes, if you have multiple jobs and total NI exceeds the maximum, HMRC should refund automatically after tax year ends. If working as both employed and self-employed, you may overpay - claim refund via form CA5601. Directors should use annual calculation method to avoid monthly overpayments. Check P60 and self-assessment calculations.

Related Resources

• UK Tax Calculator - Calculate combined income tax and NI instantly
• Income Tax Guide 2026 - Complete income tax rates and bands
• Take-Home Pay Calculator - See exact monthly take-home after all deductions
• Student Loan Repayment Guide - Add student loan deductions to NI and tax

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Official Sources:

• HMRC: National Insurance Rates 2025/26
• GOV.UK: Employment Allowance (increased to £10,500)
• HMRC: Class 2 NI Voluntary Contributions (April 2025 changes)
• GOV.UK: Check Your NI Record

Last updated: 10 December 2025 Disclaimer: National Insurance rates and thresholds for 2025/26 tax year (6 April 2025 - 5 April 2026). Employee Class 1: 8% (£12,571-£50,270) then 2% (£50,270+). Employer Class 1: 15% above £5,000 (changed April 2025 from 13.8% and £9,100). Employment Allowance: £10,500 (doubled from £5,000). Self-employed Class 4: 6% then 2%. Class 2: £3.50/week voluntary only (automatic credits if profits ≥ £6,845). All thresholds frozen until 2031. This guide covers NI only - combine with income tax for complete deductions. NI treatment depends on employment status and individual circumstances. UK Calculator is not a tax adviser - consult HMRC or qualified accountant for complex situations.