National Insurance for Freelancers and Self-Employed UK 2026/27

Types of National Insurance

There are several classes of National Insurance, each applying to different circumstances. As a freelancer or self-employed person, Class 4 is the one that affects you most — but it helps to understand the full picture.

Class	Who pays	What it covers
Class 1	Employees and employers	Paid on employment earnings through PAYE. Employees pay 8% on earnings between £12,570 and £50,270, and 2% above. Employers pay 15% on earnings above £5,000.
Class 2	Self-employed (abolished)	A flat weekly charge paid by self-employed people. Abolished from 6 April 2024 — no longer payable.
Class 3	Voluntary	Voluntary contributions to fill gaps in your NI record. Used to protect or boost State Pension entitlement.
Class 4	Self-employed	Paid on self-employment profits through Self Assessment. 9% on profits between £12,570 and £50,270, and 2% above.
Class 1A / 1B	Employers	Paid by employers on benefits in kind (company cars, private medical insurance, etc.) rather than on salary.

Class 4 National Insurance rates 2026/27

Class 4 NI is calculated on your self-employment profits after allowable business expenses. The rates for 2026/27 are:

Profit band	Class 4 rate
Up to £12,570	0%
£12,570 to £50,270	9%
Above £50,270	2%

Worked example — £40,000 profit: Class 4 NI = (£40,000 − £12,570) × 9% = £2,469

Worked example — £60,000 profit: Class 4 NI = (£50,270 − £12,570) × 9% + (£60,000 − £50,270) × 2% = £3,393 + £195 = £3,588

Class 2 NI — what changed in April 2024

Before April 2024, self-employed people paid Class 2 NI — a flat weekly charge of £3.45 (in 2023/24) — alongside Class 4 on their profits. Class 2 was abolished from 6 April 2024 as part of the Spring Budget 2023 reforms.

The abolition removed a separate weekly bill, but it also changed how self-employed people qualify for State Pension. Previously, paying Class 2 automatically gave you a qualifying year. Now, you need profits above the lower profits limit (£12,570) so that Class 4 is payable — that Class 4 payment counts as your qualifying contribution for the year.

If your profits are below £12,570 and you want to protect your State Pension record, you can make voluntary Class 3 contributions instead.

When do you pay National Insurance?

Unlike employees, who have NI deducted from every payslip through PAYE, self-employed people pay Class 4 NI once a year as part of their Self Assessment tax return.

Your Class 4 NI bill is calculated when you file your return and is due by 31 January following the end of the tax year — the same deadline as your income tax. For the 2026/27 tax year (6 April 2026 to 5 April 2027), payment is due by 31 January 2028.

If you also owe payments on account, your January bill will include an advance payment towards next year's tax and NI as well.

National Insurance and your State Pension

Your National Insurance record determines how much State Pension you receive when you reach State Pension age. You need:

• 35 qualifying years for the full new State Pension (currently around £11,502 per year)
• At least 10 qualifying years to receive any State Pension at all

As a self-employed person, you earn a qualifying year when your Class 4 NI is payable — meaning your profits exceed £12,570 for that tax year. Each year Class 4 is due counts as one qualifying year on your NI record.

National Insurance for limited company directors

If you operate through a limited company, you do not pay Class 4 NI on company profits. Instead, you pay Class 1 NI on any salary the company pays you through PAYE — the same as any employee.

Many directors set their salary at the employer NI secondary threshold of £5,000 for 2026/27. At this level, both employee and employer NI on the salary are typically zero, while the earnings can still count as a qualifying year for State Pension — subject to wider rules.

Profits extracted as dividends do not attract National Insurance of any class. This is one of the main reasons limited companies can be more tax-efficient at higher income levels — dividends avoid NI entirely, whereas sole traders pay Class 4 on all profits.

How National Insurance compares — employed vs self-employed

At the same gross income level, the total NI cost differs significantly depending on whether you are employed or self-employed. Here is a comparison at £50,000:

	Employed (£50,000 salary)	Self-employed (£50,000 profit)
Employee / Class 4 NI	£2,994	£3,369
Employer NI	£6,750	—
Total NI cost	£9,744	£3,369

The self-employed person pays less NI because there is no employer NI component — but they also receive no employment rights, paid holiday, sick pay or employer pension contributions in return.

Reducing your National Insurance bill

Class 4 NI is calculated on profit after allowable business expenses, so legitimate ways to reduce your bill include:

• Claim all allowable expenses — every pound of legitimate business expense reduces your taxable profit and therefore your Class 4 NI bill
• Personal pension contributions — contributions to a registered pension scheme reduce your taxable income for income tax purposes. They do not directly reduce Class 4 NI (which is calculated on profits before pension relief), but they reduce your overall tax bill
• Operating through a limited company — at higher income levels, extracting profits as dividends rather than salary avoids NI on the dividend portion entirely. This becomes more relevant above around £30,000–£35,000 profit, though company admin costs must be weighed against the saving

Frequently asked questions

Do self-employed people pay less National Insurance than employees?

Generally yes. Self-employed pay Class 4 at 9% on profits between £12,570 and £50,270. Employees pay 8% employee NI plus their employer pays 15% employer NI — a combined cost significantly higher than Class 4.

Does self-employment NI count toward State Pension?

Yes. Paying Class 4 NI on profits above £12,570 gives you a qualifying year for State Pension. You need 35 qualifying years for a full State Pension.

What happened to Class 2 National Insurance?

Class 2 NI was abolished from 6 April 2024. Self-employed people previously paid a flat weekly Class 2 charge alongside Class 4. Now only Class 4 applies.

Do I pay NI on dividends?

No. Dividends are not subject to National Insurance of any class. This is one of the main tax advantages of operating through a limited company.

When do self-employed people pay their NI bill?

Class 4 NI is calculated and paid as part of your annual Self Assessment tax return — by 31 January following the end of the tax year, alongside your income tax.