National Insurance 2025/26: Rates, Thresholds and What You Actually Pay

National Insurance is the deduction people notice second and understand last. It looks like a tax, is collected like a tax, but is legally a contribution that buys you entitlement to the State Pension and some benefits. The rates and thresholds for 2025/26 are simple once you separate the classes.

Employee National Insurance (Class 1)

If you are employed, you pay Class 1 contributions on your gross earnings:

• 0% on earnings up to £12,570 a year (the primary threshold)
• 8% on earnings from £12,570 to £50,270 (the upper earnings limit)
• 2% on everything above £50,270

The 8% rate replaced 10% in April 2024 and has stayed there. Only the slice of income inside each band is charged, so someone on £30,000 pays 8% of £17,430, not 8% of £30,000.

Unlike income tax, National Insurance is calculated per pay period rather than cumulatively across the year. Two identical salaries can produce slightly different NI if one person is paid weekly and the other monthly, because the threshold is applied to each pay period.

Employer National Insurance

Employers pay a separate 15% contribution on earnings above the secondary threshold of £5,000 a year. Since April 2025 the threshold dropped from £9,100 to £5,000, which pulled many part-time and lower-paid jobs into employer NI for the first time, and the Employment Allowance rose to £10,500.

Employer NI is not taken from your pay, but it does affect what an employer can offer. A £35,000 salary costs the business about £39,500 once employer NI and pension are included, which is why salary negotiations sometimes stall on the total cost rather than the headline figure.

Self-Employed National Insurance

Sole traders and partners pay Class 4 contributions through Self Assessment:

• 6% on profits between £12,570 and £50,270
• 2% on profits above £50,270

Class 2 was abolished as a compulsory charge from April 2024. If your profits are below the Small Profits Threshold you can still pay Class 2 voluntarily to protect your State Pension record, at a small weekly rate set by HMRC each year.

What National Insurance Buys You

Each tax year in which you pay or are credited with enough NI counts as a qualifying year. You currently need:

• 10 qualifying years for any State Pension at all
• 35 qualifying years for the full new State Pension

You can check your record and see gaps in your personal tax account. Paying voluntary contributions to fill a gap is sometimes excellent value and sometimes a waste of money, so check the record before paying. Gaps older than six years generally cannot be filled.

NI credits also count when you are not paying contributions: while claiming Child Benefit for a child under 12, while on Statutory Sick Pay, or while caring for someone. Those credits protect your record even when no money changes hands.

Worked Examples

Salary	Employee NI	Effective NI rate
£20,000	£594.40	3.0%
£30,000	£1,394.40	4.6%
£50,270	£3,016.00	6.0%
£70,000	£3,410.60	4.9%
£100,000	£4,010.60	4.0%

The effective rate rises up to the upper earnings limit and then falls, because everything above £50,270 is charged at 2%. That is why high earners often feel that a pay rise is worth more than they expected.

Check your own figure with the free UK National Insurance Calculator. It shows the 8% band, the 2% band and your net pay after NI.

National Insurance vs Income Tax

The two deductions are calculated separately and have different thresholds, so a change in one does not move the other:

• Income tax starts at £12,570 through the personal allowance and is charged at 20%, 40% or 45%.
• National Insurance starts at £12,570 through the primary threshold and is charged at 8% or 2%.

They happen to share the lower threshold this year, which makes the numbers easy to confuse. Our UK income tax guide covers the tax bands, and the payslip guide shows both deductions on a real monthly payslip.

Scotland and Northern Ireland

National Insurance is a UK-wide system, so the rates and thresholds are identical in Scotland, Wales, England and Northern Ireland. Only income tax differs, because Scotland sets its own bands.

Putting It Together

For a full picture of what a salary pays, run the numbers through the UK Income Tax Calculator and then the National Insurance calculator. The take-home pay examples show the combined result for £25,000 up to £100,000, and the UK Tax Calculators hub has every UK tool in one place.