Guide · tax year 2026/27
Self-employed National Insurance explained
Class 4 and Class 2 National Insurance for the self-employed, and how they are paid.
If you work for yourself, you pay National Insurance on your profits rather than through payroll. There are two classes that matter for the self-employed: Class 4, which most people with a decent profit pay, and Class 2, which you no longer have to pay but which can still matter for your record. This guide explains both, using 2026/27 figures.
Profit, not turnover
National Insurance and income tax are worked out on your profit: your turnover minus allowable expenses. GOV.UK gives the example that if your turnover is a certain amount and you claim allowable expenses, you only pay income tax on what is left, known as your taxable profit (GOV.UK: expenses if you're self-employed).
Class 4 National Insurance
For 2026/27, you pay 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270 (GOV.UK: self-employed National Insurance rates). You pay nothing on profits below the lower limit.
GOV.UK says most people pay Class 2 and Class 4 National Insurance through Self Assessment.
Class 2 National Insurance
You no longer have to pay Class 2. If your profits are £7,105 or more a year, you are treated as having paid it, to protect your National Insurance record. If your profits are below that, you do not have to pay, but you can choose to pay voluntarily, at £3.65 a week for 2026/27 (GOV.UK).
A worked example
Take a profit of £40,000:
- Class 4: 6% on the profit above £12,570, which is £1,645.80;
- Class 2: treated as paid, as the profit is over £7,105, so nothing extra;
- income tax on the same profit: £5,486.00.
That leaves £32,868.20 for the year.
Employed and self-employed at the same time
If you have a job and also work for yourself, your employer takes Class 1 National Insurance from your wages, and you may have to pay Class 4 on your self-employed profit. GOV.UK says how much you pay "depends on your combined wages and your self-employed work", and HMRC tells you what is due after you file your Self Assessment return (GOV.UK: how much you pay).
The trading allowance
If your gross trading income is £1,000 or less in a year, you usually do not need to tell HMRC about it. If it is more, you can deduct a flat £1,000 instead of your actual expenses. Some people cannot use it, for example on income from a company or partnership they are connected to (GOV.UK: tax-free allowances).
When you stop paying
You stop paying Class 4 National Insurance from 6 April, the start of the tax year, after you reach State Pension age (GOV.UK: National Insurance).
Class 4 and income tax at different profits
| Profit | Income tax | Class 4 | You keep |
|---|---|---|---|
| £15,000 | £486.00 | £145.80 | £14,368.20 |
| £30,000 | £3,486.00 | £1,045.80 | £25,468.20 |
| £50,000 | £7,486.00 | £2,245.80 | £40,268.20 |
| £80,000 | £19,432.00 | £2,856.60 | £57,711.40 |
Self-employed and employed compared
On the same amount, the self-employed usually pay less National Insurance than employees, because the Class 4 rate is lower than the employee rate. On £30,000 of profit, Class 4 is £1,045.80; an employee on a salary of £30,000 pays £1,394.40 of Class 1. Income tax is the same in both cases: £3,486.00 against £3,486.00. Remember that an employee's salary and a self-employed profit are not the same thing: profit is after business expenses, and employees may get benefits such as paid holiday and an employer pension contribution.
The cost of voluntary Class 2
At £3.65 a week, paying voluntary Class 2 for a whole year costs about £189.80. GOV.UK explains when you can pay it and how.
Self-employed in Scotland
If you live in Scotland, income tax on your profit is worked out with the Scottish bands. On a profit of £40,000, income tax is £5,551.07 in Scotland, compared with £5,486.00 elsewhere. Our calculator uses the same Class 4 rates for Scotland. See Scottish income tax explained.
Setting money aside
Because nothing is taken from your income as you earn it, it is usually up to you to put money aside for income tax and National Insurance. Working out the tax on your expected profit, for example with our calculator, and saving that share of what you earn through the year can stop the bill coming as a shock. The figures in the table above show how large that share can be at different profit levels.
Keeping records
Your profit depends on your allowable expenses, so keep records of your income and costs through the year. GOV.UK explains which expenses you can claim and how to work out your taxable profit.
Common questions
My profit is small. Do I pay any National Insurance?
Not Class 4 if your profit is below £12,570, and Class 2 is voluntary below £7,105.
Where can I work out my figure?
Use our self-employed tax calculator, which shows income tax and Class 4 together.
General information for the 2026/27 tax year, not financial or tax advice. We are not HMRC. Found a mistake? See our corrections policy.