National Insurance Contributions
National Insurance (NI) is a tax on earnings paid by employees and employers, as well as self-employed people. The money raised goes towards state benefits like the State Pension.
National Insurance rates for 2025
Employee rates (Class 1 National Insurance)
| Band | Taxable income | Rate |
|---|---|---|
| Primary Threshold | Up to £9,880 | 0% |
| Main rate | £9,881 to £50,270 | 8% |
| Higher rate | over £50,270 | 2% |
How National Insurance works
You pay National Insurance contributions if you're:
- 16 or over
- an employee earning above a certain threshold
- self-employed and making a profit above a certain threshold
National Insurance classes
The type of National Insurance you pay depends on your employment status and how much you earn:
- Class 1: Paid by employees earning more than £9,880 a year
- Class 2: Paid by self-employed people
- Class 3: Voluntary contributions to fill gaps in your National Insurance record
- Class 4: Paid by self-employed people with profits over a certain amount
Example calculation
If you earn £60,000 in the tax year, you'll pay:
- 0% on £9,880 (Primary Threshold) = £0
- 8% on £40,390 (£50,270 - £9,880) = £3,231.20
- 2% on £9,730 (£60,000 - £50,270) = £194.60
Total National Insurance = £3,425.80
You can use our UK Tax Calculator to quickly estimate your Income Tax and National Insurance based on your annual salary.