Guide · tax year 2026/27
How National Insurance works for employees
Who pays Class 1 National Insurance, the thresholds and rates, and why it is worked out each pay period.
National Insurance is paid on earnings and builds your National Insurance record, which counts towards things like the State Pension. If you are an employee, you pay Class 1 National Insurance through your pay. This guide explains who pays it, how much, and why your payslip might not match a yearly figure.
Who pays Class 1 National Insurance
You pay National Insurance if you are 16 or over and are an employee earning more than £242 a week from one job (GOV.UK: National Insurance). Your employer takes it from your wages before you are paid. You stop paying Class 1 National Insurance when you reach State Pension age.
The threshold applies to your earnings from each job, as GOV.UK puts it "from one job". Self-employed people pay different classes of National Insurance on their profits, explained in our guide for the self-employed.
Rates and thresholds for 2026/27
Employee National Insurance has a main rate on earnings between two thresholds, and a lower rate on earnings above the upper one (GOV.UK: how much you pay):
| Earnings | A week | A year | Rate |
|---|---|---|---|
| Up to the primary threshold | £242 | £12,570 | Nothing |
| Main band | Up to £967 | Up to £50,270 | 8% |
| Above the upper earnings limit | Over £967 | Over £50,270 | 2% |
So National Insurance takes a bigger share of pay in the middle band than above it. Someone earning well above the upper limit pays a smaller rate on their top slice than someone in the main band.
Worked examples
On £35,000 a year: nothing on the first £12,570, then 8% on the rest. That is £1,794.40 a year, or about £149.53 a month.
On £70,000 a year: 8% on the earnings between £12,570 and £50,270, then 2% on the part above. That is £3,410.60 a year.
Why National Insurance is worked out each pay period
Payroll works out National Insurance for each pay period, which is the interval you are paid at, such as a week or a month (HMRC manual NIM08020), using thresholds for that period.
When a bonus or other extra payment is paid with your normal wages, it is added to the pay for that period and National Insurance is worked out on the total (HMRC manual NIM08610). So if your pay goes up and down, the National Insurance on your payslips can add up to a different total from a yearly calculation. Our guide to bonuses covers this.
Pensions and National Insurance
How your workplace pension is set up makes a difference. With salary sacrifice, your salary is reduced, so you pay no National Insurance on the part you give up (GOV.UK: salary sacrifice). With a net pay arrangement, your pension contribution is taken before income tax, but National Insurance is still worked out on your full pay (HMRC manual NIM02365). See salary sacrifice or net pay?
Employer National Insurance
Your employer also pays National Insurance on your earnings (GOV.UK: National Insurance rates). It is not shown in our calculators, which show only what you pay.
Student loans use the same pay
If you repay a student loan through payroll, your employer uses the same gross pay that is used for National Insurance (GOV.UK: student loan guidance for employers). So salary sacrifice, which lowers that pay, generally lowers your student loan repayment as well. See student loan plans explained.
National Insurance at different salaries
This table shows employee National Insurance for a full year at four salaries, alongside income tax for comparison:
| Salary | National Insurance | Income tax |
|---|---|---|
| £25,000 | £994.40 | £2,486.00 |
| £45,000 | £2,594.40 | £6,486.00 |
| £65,000 | £3,310.60 | £13,432.00 |
| £100,000 | £4,010.60 | £27,432.00 |
Notice how National Insurance grows quickly up to the upper earnings limit and then much more slowly, while income tax keeps growing faster as income rises. On lower salaries, National Insurance can be a large part of your total deductions; on higher salaries, income tax dominates. That is because National Insurance has a lower rate above the upper limit, while income tax has a higher one.
If you have two jobs
If you work for two different employers, each works out National Insurance separately for their own job (GOV.UK: if your employee has more than 1 job). So if you have a second, smaller job, you might pay no National Insurance on it at all, even though your total pay from both jobs is over the threshold. The same works the other way: two jobs each just over the threshold mean National Insurance on both.
Common questions
Do I pay National Insurance after State Pension age?
No. GOV.UK says you stop paying Class 1 National Insurance when you reach State Pension age.
Why did I pay more National Insurance in one month?
Because it is worked out for each pay period, a month with extra pay, such as overtime or a bonus, can mean more National Insurance that month.
Where can I check my own figures?
Use our National Insurance calculator for a band-by-band breakdown, or the salary calculator to see it alongside income tax.
General information for the 2026/27 tax year, not financial or tax advice. We are not HMRC. Found a mistake? See our corrections policy.