Do Self-Employed People Pay National Insurance in the UK?
If you are self-employed in the UK, you have probably asked yourself this question at some point: Do I have to pay National Insurance on top of my Income Tax?
The answer is yes for many self-employed people, but not everyone has to make an actual National Insurance payment.
Unlike employees, whose Income Tax and National Insurance are generally deducted from their wages through PAYE, self-employed individuals usually calculate their business profits, report them to HM Revenue & Customs (HMRC) and pay any tax and National Insurance due through Self Assessment.
However, the rules have changed significantly over the last few years, particularly regarding Class 2 National Insurance.
In this blog post, I want to explain how National Insurance works for self-employed people in the 2026–27 tax year, when you may need to pay it, and when you may not have to pay anything at all.
I will also use practical examples to make the rules easier to understand, because I believe understanding your tax obligations should not require you to be an accountant!
1. Why do self-employed people pay National Insurance in the UK?
National Insurance is a contribution system that helps determine entitlement to certain state benefits, including the State Pension and some contribution-based benefits.
For self-employed people, National Insurance is generally calculated using their taxable business profits rather than their total sales or turnover.
For example, imagine that you run a cleaning business. During the tax year, your business generates £40,000 in sales, but you incur £15,000 in allowable business expenses.
Your profit would be:
£40,000 − £15,000 = £25,000.
It is generally the £25,000 profit figure, rather than the £40,000 turnover, that is used to calculate your Class 4 National Insurance.
This is an important distinction because some business owners mistakenly assume that National Insurance is calculated on everything their business receives.
Your National Insurance record can also affect your entitlement to the new State Pension. You will usually need at least 10 qualifying years to receive any new State Pension, although the amount you receive depends on your individual record. You may need 35 qualifying years for the full amount if your National Insurance record started after April 2016 and no transitional rules affect your entitlement.
It is therefore worth checking your National Insurance record rather than simply assuming that you are building up qualifying years.
You can check it here: Check your National Insurance record.
2. How do self-employed people pay National Insurance in 2026–27?
For the 2026–27 tax year, which runs from 6 April 2026 to 5 April 2027, there are two main classes of National Insurance relevant to most self-employed people:
- Class 2 National Insurance: Most people no longer have to pay compulsory Class 2 contributions. Instead, eligible people with profits at or above the Small Profits Threshold generally receive National Insurance credits automatically.
- Class 4 National Insurance: This is payable by most self-employed people whose annual profits exceed £12,570.
The rules depend on your annual profits, so let us look at the thresholds.
| National Insurance rule for 2026–27 | Amount |
|---|---|
| Small Profits Threshold for Class 2 purposes | £7,105 |
| Lower Profits Limit for Class 4 | £12,570 |
| Upper Profits Limit for Class 4 | £50,270 |
| Voluntary Class 2 contribution rate | £3.65 per week |
| Class 4 rate on profits between £12,570 and £50,270 | 6% |
| Class 4 rate on profits above £50,270 | 2% |
These figures are based on HMRC’s published rates for 2026–27.
The key point is that you need to look at your profit level before deciding whether you have to pay National Insurance.
3. What happens if your self-employed profits are £7,105 or more?
If your annual profits are at least £7,105, you will generally receive National Insurance credits for Class 2 purposes without having to pay Class 2 contributions.
If your profits are more than £12,570, you will generally also have to pay Class 4 National Insurance.
Let us look at some examples.
Example 1: Jack makes a profit of £6,000
Jack runs a small gardening business alongside his other commitments. After deducting his allowable business expenses, his profit for 2026–27 is £6,000.
Because his profits are below £7,105:
- He does not have to pay Class 4 National Insurance.
- He does not automatically receive Class 2 credits based on the Small Profits Threshold.
- He may choose to pay voluntary Class 2 contributions to protect his National Insurance record, if eligible.
If Jack chooses to pay voluntary Class 2 contributions for all 52 weeks of the tax year, the calculation at £3.65 per week would be:
52 × £3.65 = £189.80.
Before paying voluntarily, I would recommend checking Jack’s National Insurance record to establish whether he actually needs the additional contributions. He may already have a qualifying year through employment or another qualifying arrangement.
Example 2: Sarah makes a profit of £10,000
Sarah runs a small online business. Her profit for 2026–27 is £10,000.
Her profit is above £7,105 but below £12,570.
In this situation:
- She generally receives Class 2 National Insurance credits automatically.
- She does not have to pay Class 2 contributions.
- She does not have to pay Class 4 National Insurance because her profit does not exceed £12,570.
Sarah’s compulsory self-employed National Insurance bill would therefore generally be £0.
This is one of the reasons why the answer to the question of whether self-employed people pay National Insurance can be both yes and no.
Sarah should still check that her Self Assessment return is correct and that her National Insurance record reflects the relevant credits.
4. How is Class 4 National Insurance calculated?
Class 4 National Insurance is calculated on profits above the applicable threshold.
For 2026–27, the rates are:
- 6% on profits above £12,570 up to £50,270.
- 2% on profits above £50,270.
Let’s look at some practical examples.
Example 3: Jack makes a profit of £20,000
Suppose Jack’s business makes an annual profit of £20,000.
The first £12,570 is below the Class 4 National Insurance threshold, so he does not pay Class 4 contributions on that amount.
His calculation would be:
| Calculation | Amount |
|---|---|
| Annual profit | £20,000 |
| Less: Class 4 threshold | £12,570 |
| Profits subject to Class 4 at 6% | £7,430 |
| Class 4 National Insurance: £7,430 × 6% | £445.80 |
Jack’s Class 4 National Insurance bill would be £445.80.
He would not normally have to pay compulsory Class 2 contributions on top of this, because the Class 2 credit rules apply separately.
Example 4: Sarah makes a profit of £60,000
Now imagine that Sarah’s online business grows considerably and she makes a profit of £60,000.
Her Class 4 National Insurance calculation would be:
| Calculation | Amount |
|---|---|
| Profits between £12,570 and £50,270: £37,700 × 6% | £2,262.00 |
| Profits above £50,270: £9,730 × 2% | £194.60 |
| Total Class 4 National Insurance | £2,456.60 |
Sarah’s Class 4 National Insurance liability would be £2,456.60.
These examples assume that the individuals are subject to the standard rules for self-employed Class 4 contributions and that no special circumstances affect their liability. <Cite refs={[“turn279799search4″,”turn279799search9”]}/>
5. What if your profits are below £7,105?
This is an area where I would encourage self-employed people to pay particular attention.
If your annual profits are below £7,105, you generally do not have to pay compulsory Class 2 or Class 4 National Insurance.
However, having no compulsory National Insurance bill does not necessarily mean that you should ignore your National Insurance record.
If you do not have enough qualifying contributions or credits from other sources, you may have a gap in your record.
Depending on your circumstances, you may be able to pay voluntary Class 2 contributions at £3.65 per week for 2026–27.
For example, imagine that Mary runs a small sewing business from home. She makes a profit of £4,500 during the tax year and does not have another job.
Mary may not have to pay compulsory self-employed National Insurance, but she should check whether she is receiving qualifying credits from another source.
If she needs to protect her National Insurance record, voluntary contributions may be worth considering.
I would not advise Mary to pay voluntarily without checking her record first. The important question is whether the contribution would improve her entitlement to benefits or her future State Pension.
You can read more about this on the official HMRC guidance for self-employed National Insurance.
6. How do you report and pay your National Insurance?
Most self-employed people report their business profits through Self Assessment.
The normal process is as follows:
- Keep records of your business income and allowable expenses.
- Calculate your taxable business profit for the tax year.
- Complete your Self Assessment tax return.
- HMRC calculates the relevant National Insurance contributions and Income Tax based on the information provided.
- Pay the amount due by the applicable deadline.
For the 2026–27 tax year, the normal online Self Assessment filing deadline is 31 January 2028, and the normal deadline for paying the balance of tax and National Insurance due for that year is also 31 January 2028.
You may have earlier payment obligations, such as payments on account, depending on your circumstances.
It is important to remember that Income Tax and National Insurance are separate liabilities, even though they may be collected through the same Self Assessment process.
You can find the official guidance here: Register for and file a Self Assessment tax return.
7. What if you are employed and self-employed at the same time?
You may have a full-time job and also run a business on the side.
If this applies to you, your employer will generally deduct Class 1 National Insurance from your employment earnings through PAYE, while your self-employed profits may also be subject to Class 4 National Insurance.
The calculation can be more complicated because your employment earnings and self-employed profits may interact under the relevant National Insurance rules.
For example, imagine that David earns £30,000 from his job and makes an additional £15,000 profit from a freelance consultancy business.
His employer will calculate and deduct Class 1 National Insurance from his salary. His freelance profits may also create a Class 4 National Insurance liability.
David should not assume that paying National Insurance through his employer means he automatically has nothing further to pay on his self-employed profits.
The correct calculation depends on his earnings and circumstances, and HMRC will generally work out the Class 4 liability through Self Assessment.
Conclusion: Do self-employed people pay National Insurance in the UK?
Thank you for taking the time to read my blog on Do self-employed people pay National Insurance in the UK?
I hope this article has helped you understand how National Insurance works for self-employed people in the UK for the 2026–27 tax year.
As we have seen, the answer is not always a straightforward yes or no. It depends largely on your annual profits, whether you have other sources of qualifying National Insurance contributions or credits, and whether you choose to pay voluntary contributions.
My advice is to keep accurate business records, submit your tax return on time and check your National Insurance record regularly. These small steps can help you avoid surprises and understand whether you are building up entitlement to the State Pension.
If you are self-employed and would like support with your accounts, Self Assessment tax return or tax planning, please get in touch. Our teamhttp://www.ronzlaccountants.co.uk would be happy to discuss your circumstances and help you understand your obligations.
Disclaimer: This article provides general information about UK self-employed National Insurance for the 2026–27 tax year. Individual circumstances can affect the calculation, and the rules may change. Please check the latest HMRC guidance or seek professional advice if you are unsure about your liability.