For self-employed individuals, understanding your National Insurance obligations is a fundamental part of tax compliance. Following significant reforms, the system for 2026/27 simplifies contributions, with Class 4 NICs being the primary profit-based charge and Class 2 NICs serving mainly to protect benefit entitlement for lower earners.
These contributions are typically calculated and paid through your annual Self Assessment tax return.
Class 4 National Insurance: The Profit-Related Contribution
Class 4 NICs are the main contributions paid by the self-employed and are calculated as a percentage of your annual taxable profits. You only pay Class 4 NICs if your profits are above a certain threshold.
For the tax year 2026/27 (6 April 2026 to 5 April 2027), the rates and thresholds are as follows:
| Profit Threshold |
Class 4 NI Rate |
| Profits between £12,570 and £50,270 (Lower and Upper Profits Limit) |
6% |
| Profits above £50,270 |
2% |
This 6% main rate reflects reductions legislated in the Spring Budget 2024, which lowered the rate from 9% to 6% from 6 April 2024. The payment is made on profits immediately derived from your trade, profession, or vocation.
Class 2 National Insurance: Protecting Your Benefit Entitlement
Following reforms which took effect from 6 April 2024, there is no longer a mandatory requirement for self-employed individuals to pay Class 2 NICs. However, the system is designed to protect your National Insurance record, which is crucial for accessing contributory benefits like the State Pension.
The treatment of Class 2 contributions for 2026/27 depends on your profit level.
If Your Profits are £7,105 or More
If your profits meet or exceed the Small Profits Threshold (SPT) of £7,105, you will receive a National Insurance credit without making any payment. You are treated as having paid Class 2 NICs for the year, which counts as a qualifying year for your State Pension record.
If Your Profits are Less than £7,105
If your profits are below the SPT, you will not automatically receive a National Insurance credit. To ensure you gain a qualifying year for State Pension purposes, you can choose to make voluntary Class 2 contributions.
- The voluntary Class 2 rate for 2026/27 is £3.65 per week.
This voluntary payment mechanism ensures that self-employed individuals with low profits can still build up their entitlement to state benefits.
Summary of Self-Employed NI Thresholds and Rates for 2026/27
| Contribution/Threshold |
Annual Figure |
Rate / Weekly Rate |
| Class 2 Small Profits Threshold (SPT) |
£7,105 |
N/A (Above this, you are credited automatically) |
| Class 2 Voluntary Contribution Rate |
N/A |
£3.65 per week |
| Class 4 Lower Profits Limit (LPL) |
£12,570 |
You start paying Class 4 on profits above this |
| Class 4 Main Rate Band |
£12,570 – £50,270 |
6% |
| Class 4 Upper Rate Threshold (UPL) |
£50,270 |
2% on profits above this |
How to Pay Class 2 and Class 4 NICs
For most self-employed people, both Class 4 and any voluntary Class 2 contributions are handled through the Self Assessment system. Your liability will be calculated as part of your tax return and paid to HMRC alongside your Income Tax.
You must notify HMRC when you become self-employed to ensure you are registered for Self Assessment and National Insurance correctly.
For more detailed guidance on the specifics of self-employed National Insurance, you can refer to HMRC’s National Insurance Manual, particularly the sections starting at NIM70000 for Class 2 contributions. For the legislative background to the recent changes, refer to the policy papers published alongside the Autumn Statement 2023 and Spring Budget 2024.
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