UK Tax Guide — 2026/27
National Insurance Explained
Updated July 2026
HMRC 2026/27 rates
Plain English
Last updated: 26 July 2026
National Insurance (NI) is a tax on earnings paid by employees, employers and the self-employed to fund the State Pension, NHS and other benefits. In 2026/27, employees pay 8% on earnings between £12,570 and £50,270, and 2% on anything above that.
National Insurance Rates 2026/27
| Who Pays | Class | Rate | Threshold |
|---|---|---|---|
| Employees | Class 1 | 8% | On earnings £12,570–£50,270/year |
| Employees | Class 1 | 2% | On earnings above £50,270/year |
| Employers | Class 1 (secondary) | 15% | On employee earnings above £5,000/year (2026/27) |
| Self-employed | Class 4 | 6% | On profits £12,570–£50,270 |
| Self-employed | Class 4 | 2% | On profits above £50,270 |
| Self-employed | Class 2 (voluntary) | £3.45/week | Pays towards State Pension qualifying years |
What National Insurance Pays For
NI contributions go into the National Insurance Fund, which finances:
- State Pension — you need 35 qualifying years for the full new State Pension of £11,502/year (2026/27)
- Statutory Maternity, Paternity and Adoption Pay
- Statutory Sick Pay
- Contribution-based Jobseeker’s Allowance
- A proportion of NHS funding
How NI Differs from Income Tax
NI and Income Tax are separate deductions calculated independently. Key differences:
- NI stops at State Pension age — once you reach State Pension age (currently 66), you no longer pay employee NI even if you keep working
- NI is not cumulative — unlike PAYE Income Tax, NI is calculated fresh each pay period without reference to previous months
- NI thresholds are lower — the NI Primary Threshold (£12,570) equals the Income Tax Personal Allowance in 2026/27, but this was not always the case
- Self-employed pay less — Class 4 NI rates (6%/2%) are lower than employee Class 1 rates (8%/2%)
See exactly how much NI you pay on your salary:
See NI deductions by salary: