How National Insurance Works in the UK
National Insurance is a payroll tax that also builds your State Pension. Here is how it works and what you pay in 2026/27.
What National Insurance is
National Insurance (NI) is a tax on earnings that helps pay for the State Pension and some benefits. Unlike Income Tax, it does not have a Personal Allowance in the same way. You start paying it once your earnings pass a threshold, and you pay it until you reach State Pension age.
Employee rates for 2026/27 (Class 1)
| Annual earnings | Employee rate |
|---|---|
| Up to £12,570 | 0% |
| £12,570 to £50,270 | 8% |
| Over £50,270 | 2% |
On a £35,000 salary you pay £1,794 of NI a year. The weekly equivalents are £242 and £967 a week, and NI is calculated per pay period rather than on annual earnings alone.
The self-employed
Self-employed people pay Class 4 NI of 6% on profits between £12,570 and £50,270 and 2% above that. If profits are above the small profits threshold (£7,105), Class 2 is treated as paid and no payment is due. See our self-employed tax calculator.
National Insurance and your State Pension
Each tax year in which you pay enough NI, or get credits, counts as a “qualifying year”. You usually need 35 qualifying years for the full new State Pension and at least 10 to get any. You can check your record and, in some cases, pay voluntary contributions to fill gaps. See our state pension age calculator.
NI is not the same as Income Tax
NI is separate from Income Tax, with different thresholds and rates, and it is calculated on different earnings. Pension contributions made by salary sacrifice reduce your NI as well as your income tax, which is why they are popular. See our guide to salary sacrifice.
This guide is general information, not financial or legal advice. Rates checked 8 October 2026 against GOV.UK.
Related
Figures are for the 2026/27 tax year from official sources and are estimates for guidance only, not financial or legal advice. Printed from ukanswers.co.uk.