Not sure what self-employed National Insurance you need to pay? Here’s our guide to Class 2 National Insurance and Class 4 National Insurance, as well as rates and thresholds.
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What is National Insurance?
National Insurance contributions (NICs) are a tax on earnings paid by the UK public. This tax is used so you can qualify for benefits, including a State Pension and certain support allowances.
National Insurance is broken down into different ‘classes’ and the class you pay depends on your employment status.
Class 1 contributions are paid by employees earning more than £183 a week and under the State Pension age. These contributions are deducted by the employer.
Self-employed people pay National Insurance contributions (NICs) in two classes: Class 2 and Class 4, with a few exceptions.
Self-employed National Insurance – what do I pay?
Most self-employed people pay National Insurance through their annual Self Assessment tax return. You pay Class 2 NICs if your profits are £6,475 or more a year, and Class 4 NICs if your profits are £9,501 or more a year (more details on rates and thresholds below).
But for some self-employed people, there are different rules:
- you won’t pay NICs if you’re under 16, or over the state retirement age
- you won’t have to pay Class 2 NICs if you’re a married woman who opted into the Reduced Rate scheme before it ended in April 1977
- separate rules apply to share fishermen and voluntary development workers
Some self-employed people don’t pay National Insurance contributions through Self Assessment, but they may choose to make voluntary contributions. These workers include:
- examiners, moderators, and invigilators
- religious ministers, providing that they receive no salary or stipend
- people who make investments, but without receiving a commission or fee, and not as a business
- some people whose business involves land or property
Self-employed National Insurance rates
Class 2 and Class 4 NICs are charged at different rates.
The Class 2 National Insurance contribution is a fixed amount of £3.05 a week and it’s only charged if your annual profits are £6,475 or more.
Class 4 National Insurance contributions are only charged if your profits are above £9,500 a year. The rate is nine per cent of profits between £9,501 and £50,000 and two per cent on profits over £50,000.
What is Class 2 National Insurance?
| Class 2 NICs | 2020-21 | 2021-22 |
|---|---|---|
| Small profits threshold | £6,475 | £6,515 |
| Weekly rate | £3.05 | £3.05 |
What is Class 4 National Insurance?
| Class 4 NICs | 2020-21 | 2021-22 |
|---|---|---|
| Self-employed people start paying above | £9,500 | £9,568 |
| A lower rate above | £50,000 | £50,270 |
| Initial rate | 9% | 9% |
| Rate above £50,000 | 2% | 2% |
The government has announced a 1.25 percentage point rise in National Insurance rates from April 2022, to help pay for health and social care.
Voluntary self-employed National Insurance contributions
Some people choose to make voluntary National Insurance contributions. You might do this if there are gaps in your National Insurance record that could affect your entitlement to the State Pension, or if you had small profits during periods of self-employment.
If you’re concerned that there may be gaps in your National Insurance record, you should ask for a copy using the gov.uk tool. You can then check whether you’re eligible to make voluntary contributions.
National Insurance contributions – self-employed payment process
For most self-employed people, National Insurance payment is made through the Self Assessment process. You need to file your return and pay your bill by 31 January each year. For more information, read our small business guide to Self Assessment tax returns.
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