National Insurance (NI) is a tax on earnings and self-employed profits.
Your National Insurance contributions (NICs) are paid into a fund, from which some state benefits are paid.
This includes the state pension, statutory sick pay or maternity leave, or entitlement to additional unemployment benefits.
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National Insurance has to be paid by both employed and self-employed workers from 16 until they reach state pension age (currently 66).
In some situations, you will be exempt from paying National Insurance contributions. For example, if you earn below £12,570, are unemployed, or receiving benefits.
If you don't have to pay National Insurance you might be eligible for National Insurance credits , or you can choose to make voluntary contributions. Both help you build up 'qualifying years', which count towards your entitlement for the state pension, and other benefits.
The amount of National Insurance you pay depends on whether you are employed or self-employed and what you earn. These categories are known as 'classes'.
National Insurance is worked out in a similar way to income tax and is calculated on gross earnings (before tax or pension deductions) or profits (earnings minus allowable expenses) above a threshold.
In the table below, we explain the different National Insurance classes, the rates that apply to these classes, who needs to pay what in 2024-25, and how payment is collected.
| National Insurance classes | National Insurance rates 2024-25 | Who pays? | How you pay |
|---|---|---|---|
| Class 1 | 8% on earnings over £12,570, and 2% on earnings over £50,270 | Employees | PAYE |
| Class 2 | n/a | Self-employed | Self-assessment |
Class 4 | 6% on profits over £12,570 and 2% on profits over £50,270 | Self-employed | Self-assessment |
| Class 3 | £17.45 a week | Voluntary contributions made by those with gaps in their NI record | Paid to HMRC via form CF83 |
If you're employed, National Insurance is automatically deducted from your monthly pay.
If you're self-employed, you'll need to organise these contributions yourself, usually through your self-assessment tax return.
Your employer will deduct Class 1 National Insurance contributions from your:
NI is collected via PAYE together with your income tax.
In 2024-25, employees pay 8% Class 1 National Insurance on earnings over £12,570, and 2% on earnings over £50,270.
Note that because NI is calculated monthly (if you're paid monthly), you could end up paying more on irregular income such as bonuses.
There were a lot of National Insurance changes in 2022-23.
In April 2022, Class 1 rates went up by 1.25 percentage points to 13.25% on earnings between £9,880 and £50,270, and 3.25% on earnings over £50,270. The National Insurance threshold rose on 6 July 2022, from £9,880 to £12,570. On 6 November 2022, the 1.25 percentage point rate rise was reversed, so employees then paid 12% and 2% in NICs.
There were also changes in 2023-24. In 2023-24, employees paid 12% Class 1 National Insurance on earnings over £12,570, and 2% on earnings over £50,270 until 5 January. From 6 January 2024, the rate was reduced from 12% to 10% on earnings over £12,570 but under £50,270.
If you're self-employed, you pay Class 4 National Insurance.
In 2024-25, the Class 2 flat rate of National Insurance has been abolished and the Class 4 rate has fallen to 6% on profits between £12,570 and £50,270, and remains at 2% on profits over £50,270.
In 2023-24, Class 2 contributions were £3.45 a week and paid if your profits were more than £12,570 a year. However, if you earned more than £6,725 you would have still been able to build up National Insurance credits, even though you're not paying Class 2 contributions. Class 4 contributions were charged at 9% on profits between £12,570 and £50,270, and at 2% on profits over £50,270.
Class 2 rates were charged at a flat rate of £3.15 per week in 2022-23.
Class 4 contributions were charged on profits above £9,880 at 10.25% between 6 April and 5 July; from 6 July onwards the threshold rose to £12,570. You paid 3.25% on earnings above £50,270. From 6 November 2022, Class 4 rates were reduced to 9% for profits between £12,570 and £50,270, and 2% on profits over £50,270.
Use our National Insurance calculator to discover how much you'll pay.
You can also see what you would owe for previous years, based on your income - simply select the tax year you want to see from the dropdown menu.
To find out your total bill for 2022-23 you will need to check what you will pay between 6 April and 5 July, between 6 July and 5 November, and between 6 November and 5 April and add the three figures together.
Please note the figures shown indicate what you'd owe on an annual basis, and assume you've worked for the full tax year.
The calculator makes standard assumptions about employed and self-employed people to estimate your tax breakdown. So bear in mind that what you will take home also depends on other factors such as your pension contributions and student loan repayments - and can vary depending on your tax code.
If you're missing any National Insurance contributions, you can fill in gaps by paying Class 3 'voluntary' contributions.
You can only pay voluntary contributions if:
In 204-25, Class 3 contributions cost £17.45 a week, the same as in 2023-24.
Your National Insurance number contains two letters, six numbers and a final letter.
Each number is unique - they are used to identify you so the government knows how much tax you have paid, how much state pension you might be owed, and to track your tax allowances.
Each person is only assigned one National Insurance number and you'll use the same one throughout your life.
If you are a UK national, you should receive an NI number automatically before you turn 16.
If you didn't, and are aged 16-19, you can contact HMRC
if your parent or guardian filled in a child benefit claim for you, as you may already have a National Insurance number.
If you are moving to the UK, you may have a National Insurance number allocated on your biometric residence permit. If not, you must apply once you are in the UK by calling the helpline number on 0800 141 2075.
You need to apply for an NI number before you start work in the UK.
However, you can start working before your National Insurance number arrives if you can prove your right to work in the UK - for example, by showing your visa.
When you receive your NI number, make sure your employer updates their records.
It's important to keep track of how much you've paid into National Insurance, and whether there are any gaps or credits.
You can check your National Insurance record online via the government portal.
Alternatively, you can request a paper copy of your National Insurance Statement to be mailed to you by writing to:
National Insurance contributions and Employers Office
HM Revenue and Customs
BX9 1AN
If you accidentally provide the wrong NI number, HMRC may not be able to match your contributions to your records.
Generally, HMRC staff will attempt to match erroneous NI numbers with the right person based on other information provided.
to see if there are gaps where contributions or credits have not been counted. If so, talk to your employer and ask for your records to be corrected.
on 0300 200 3500 about the error. You may be asked to show proof of your employment, like P60s or payslips.
You don't start paying National Insurance until you're over 16 years old. Students who are older than this are not exempt; if they earn enough, they pay like any other worker.
If students don't do paid work, they're not credited with NICs for the years they are studying.
This creates a gap in their contributions record, although most will still work for enough years after qualifying to merit a full state pension.
Your National Insurance contributions depend on your employment status, how much you earn, and your age and retirement status.
When you reach state pension age you no longer have to pay National Insurance contributions, even if you continue working. Employees will stop paying NI contributions as soon as they reach state pension age, which for most people will be 66.
If you continue working after state pension age you'll need to prove your age to your employer to stop NI contributions, either by producing a birth certificate or passport. Contact HM Revenue and Customs if you're unable or unwilling to provide these documents.
If you reach state pension age and you're self-employed, the rules are slightly different. Self-employed workers will need to keep paying National Insurance until the end of the tax year in which they reach state pension age.
Self-employed workers should tick the relevant box on the self-assessment tax return to claim exemption from Class 4 National Insurance contributions (NICs). Class 2 weekly self-employed National Insurance contributions should cease automatically from the Saturday following the date on which you reach state retirement age, but you should check your statements from HMRC to make sure.
Send your tax return to HMRC using the service provided by GoSimpleTax.
National Insurance contributions are only charged on income from employment or self-employment.
If you have a private or company pension and it's your only form of income, you won't pay National Insurance on it.
Similarly, you don't pay National Insurance on savings or investment income.
However, by no longer paying National Insurance, you risk not building enough contributions to get the full state pension and may need to buy voluntary contributions to get the full amount.
Until 1977, married women could opt to make National Insurance contributions at a reduced rate. They stopped building up entitlement to state pension in their own right and instead relied on their husband's National Insurance contributions record.
This was known as the 'married woman's stamp'.
Women who took this option can continue to make reduced National Insurance contributions or pay at the full rate and build up individual pension entitlement. With reduced contributions, their maximum entitlement is currently 60% of basic state pension.
Since 2016, any women in this position who have yet to reach state pension age will no longer be eligible. Their pension entitlement will depend instead on the number of qualifying years' National Insurance contributions they have made in their own right. The minimum required to get any state pension is 10 years.
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