---
title: "Classes of National Insurance 2026/27: A Complete UK Guide"
description: "National Insurance Contributions (NICs) are a fundamental part of the UK tax system, funding crucial state benefits such as the State Pension and Jobseeker's Allowance. The amount and type of NICs you pay depend on your employment status and earnings…"
url: "https://www.accountingfirms.co.uk/knowledge-bank/classes-of-national-insurance/"
updated: "2026-06-22"
category: Self Employed Tax
---

# Classes of National Insurance 2026/27: A Complete UK Guide

National Insurance Contributions (NICs) are a fundamental part of the UK tax system, funding crucial state benefits such as the State Pension and Jobseeker's Allowance. The amount and type of NICs you pay depend on your employment status and earnings level. Understanding the different classes of National Insurance is essential for ensuring compliance and managing tax liabilities effectively.

This guide provides a comprehensive breakdown of the various classes of National Insurance for the 2026/27 [tax year](https://www.accountingfirms.co.uk/blog/when-is-the-tax-return-deadline/).

###

## The Classes of National Insurance at a Glance

The National Insurance system is structured into several distinct classes, each designed for different circumstances.

| Class | Who Pays | Basis of Calculation | 2026/27 Status |
| --- | --- | --- | --- |
| **Class 1** | Employees and Employers | Employee earnings | Mandatory |
| **Class 1A** | Employers | Employee benefits in kind | Mandatory |
| **Class 1B** | Employers | Items in a PAYE Settlement Agreement (PSA) | Mandatory |
| **Class 2** | Self-employed | Flat weekly rate | Voluntary (to protect benefit entitlement) |
| **Class 3** | General Public | Flat weekly rate | Voluntary (to fill gaps in NI record) |
| **Class 4** | Self-employed | Percentage of annual profits | Mandatory |

###

### Class 1: Contributions for Employees and Employers

Class 1 NICs are paid by both employees (primary contributions) and their employers (secondary contributions) on employee earnings. These are collected automatically through the Pay As You Earn (PAYE) system.

#### Primary Class 1 (Employee Contributions)

Employees pay primary Class 1 NICs on their earnings above the Primary Threshold (PT). For 2026/27, the thresholds are frozen at their 2022-23 levels.

- **Primary Threshold (PT):** £12,570 per year.
- **Upper Earnings Limit (UEL):** £50,270 per year.

The rates for the 2026/27 tax year are:

- **8%** on earnings between the PT (£12,570) and the UEL (£50,270).
- **2%** on all earnings above the UEL (£50,270).

#### Secondary Class 1 (Employer Contributions)

Employers pay secondary Class 1 NICs on their employees' earnings above the Secondary Threshold (ST). The rate for 2026/27 is **15%**.

The Secondary Threshold for 2026/27 is **£5,000** per year. This change was implemented from 6 April 2025.

###

### Class 1A and Class 1B: Contributions on Benefits and Expenses

These classes are payable only by employers and are not deducted from employee wages.

- **Class 1A:** Paid by employers on most [taxable benefits in kind](https://www.accountingfirms.co.uk/blog/how-many-miles/) (e.g., company cars, private medical insurance) provided to employees. The rate is **15%**, aligning with the secondary Class 1 rate.
- **Class 1B:** Paid by employers on items included in a PAYE Settlement Agreement (PSA). A PSA allows an employer to make a single annual payment to cover all tax and NI due on minor or irregular expenses and benefits for employees. The rate is **15%** on the grossed-up value of the benefits.

###

### Contributions for the Self-Employed: Class 2 and Class 4

Self-employed individuals pay NICs based on their business profits, primarily through Class 4, with Class 2 now serving a specific voluntary function.

#### Class 4 Contributions

This is a mandatory contribution paid by self-employed individuals on their annual [taxable profits](https://www.accountingfirms.co.uk/blog/making-tax-digital-for-landlords/). The thresholds are aligned with the employee PT and UEL.

- **Lower Profits Limit (LPL):** £12,570 per year.
- **Upper Profits Limit (UPL):** £50,270 per year.

The rates for the 2026/27 tax year are:

- **6%** on profits between the LPL (£12,570) and the UPL (£50,270).
- **2%** on all profits above the UPL (£50,270).

#### Class 2 Contributions

Significant changes were made to Class 2 NICs from 6 April 2024. Liability to pay mandatory Class 2 contributions was removed.

- **No Longer Mandatory:** Self-employed individuals with profits above the LPL (£12,570) are no longer required to pay Class 2 NICs but will continue to receive access to contributory benefits, including the State Pension, through a National Insurance credit.
- **Voluntary Payments:** Those with profits below the Small Profits Threshold (£6,725) can choose to make voluntary Class 2 contributions to protect their NI record for access to benefits. This is often a cost-effective way to build qualifying years for the State Pension.

###

### Class 3: Voluntary Contributions

Class 3 NICs are purely voluntary and can be paid by anyone who wishes to fill gaps in their [National Insurance record](https://www.accountingfirms.co.uk/blog/what-are-payroll-records/) to improve their entitlement to the State Pension and certain other benefits. This is particularly useful for individuals who are not otherwise liable for NICs, for example, because they have low earnings or are not working.

 

*For definitive guidance on specific circumstances, it is advisable to consult the Social Security Contributions and Benefits Act 1992 and the Social Security (Contributions) Regulations 2001 (SI 2001/1004). HMRC's National Insurance Manual (NIM) also provides extensive commentary on the application of the rules.*

## References

1. [Debt Management and Banking Manual - DMBM525020 - Debt and return pursuit: NIC: general: introduction at 1](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm525020#:~:text=Debt%20Management%20and%20Banking%20Manual,%20Next%20page&text=Debt%20Management%20and%20Banking%20Manual,in%20addition%20to&text=DMBM525020%20%2D%20Debt,%20Next%20page&text=DMBM525020%20%2D%20Debt,in%20addition%20to)
2. [Finance Act 2016, s 100](https://www.legislation.gov.uk/ukpga/2016/24/section/100)
3. [The Personal Allowance and basic rate limit for income tax, and certain National Insurance contributions (NICs) thresholds, from 6 April 2026 to 5 April 2028 at 4](https://www.gov.uk/government/publications/the-personal-allowance-and-basic-rate-limit-for-income-tax-and-certain-national-insurance-contributions-nics-thresholds-from-6-april-2026-to-5-apr/income-tax-personal-allowance-and-the-basic-rate-limit-and-certain-national-insurance-contributions-thresholds-from-6-april-2026-to-5-april-2028#:~:text=levels%20up%20to%20and%20including,%20Since%20April%202017%2C%20the&text=levels%20up%20to%20and%20including,income%20in%20the&text=2027%20to%202028,%20Since%20April%202017%2C%20the&text=2027%20to%202028,income%20in%20the)
4. [The Personal Allowance and basic rate limit for income tax, and certain National Insurance contributions (NICs) thresholds, from 6 April 2026 to 5 April 2028 at 3](https://www.gov.uk/government/publications/the-personal-allowance-and-basic-rate-limit-for-income-tax-and-certain-national-insurance-contributions-nics-thresholds-from-6-april-2026-to-5-apr/income-tax-personal-allowance-and-the-basic-rate-limit-and-certain-national-insurance-contributions-thresholds-from-6-april-2026-to-5-april-2028#:~:text=Where%20we%20have%20identi%20fi,public%20fi%20nances%20on%20a&text=Where%20we%20have%20identi%20fi,of%20putting%20the&text=ed%20any%20third,public%20fi%20nances%20on%20a&text=ed%20any%20third,of%20putting%20the)
5. [The Personal Allowance and basic rate limit for income tax, and certain National Insurance contributions (NICs) thresholds, from 6 April 2026 to 5 April 2028 at 6](https://www.gov.uk/government/publications/the-personal-allowance-and-basic-rate-limit-for-income-tax-and-certain-national-insurance-contributions-nics-thresholds-from-6-april-2026-to-5-apr/income-tax-personal-allowance-and-the-basic-rate-limit-and-certain-national-insurance-contributions-thresholds-from-6-april-2026-to-5-april-2028#:~:text=21%20of%20the%20Income%20Tax,%C2%A312%2C570%20Basic%20rate%20limit%20%C2%A337%2C700&text=21%20of%20the%20Income%20Tax,2028%20PA%20%C2%A312%2C570&text=Act%202007,%C2%A312%2C570%20Basic%20rate%20limit%20%C2%A337%2C700&text=Act%202007,2028%20PA%20%C2%A312%2C570)
6. [Changes to National Insurance contributions from 6 April 2024 at 2](https://www.gov.uk/government/publications/changes-to-national-insurance-contributions-from-6-april-2024/reduction-to-the-main-rates-of-primary-class-1-and-class-4-national-insurance-contributions#:~:text=copyright%20information%20you%20will%20need,National%20Insurance%20contributions%20by%202&text=copyright%20information%20you%20will%20need,employee%20Class%201&text=to%20obtain%20permission,National%20Insurance%20contributions%20by%202&text=to%20obtain%20permission,employee%20Class%201)
7. [Changes to National Insurance contributions from 6 April 2024 at 4](https://www.gov.uk/government/publications/changes-to-national-insurance-contributions-from-6-april-2024/reduction-to-the-main-rates-of-primary-class-1-and-class-4-national-insurance-contributions#:~:text=of%20the%20Social%20Security%20Contributions,gures%20are%20set%20out%20in&text=of%20the%20Social%20Security%20Contributions,2024%20These%20fi&text=and%20Bene%20fi,gures%20are%20set%20out%20in&text=and%20Bene%20fi,2024%20These%20fi)
8. [Income Tax (Pay As You Earn) Regulations 2003 (SI 2003/2682), s 2 definition of "secondary threshold"](https://www.legislation.gov.uk/uksi/2003/2682/regulation/2)
9. [Changes to the Class 1 National Insurance Contributions Secondary Threshold, the Secondary Class 1 National Insurance contributions rate, and the Employment Allowance, all from 6 April 2025 at 9](https://www.gov.uk/government/publications/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl#:~:text=1%20NICs%20liabilities,uk&text=1%20NICs%20liabilities,about%20this%20change%2C&text=costs%20will%20include,uk&text=costs%20will%20include,about%20this%20change%2C)
10. [Changes to the Class 1 National Insurance Contributions Secondary Threshold, the Secondary Class 1 National Insurance contributions rate, and the Employment Allowance, all from 6 April 2025 at 6](https://www.gov.uk/government/publications/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl#:~:text=7%20and%20schedule%201%20of,Yield%20(%C2%A3%200%20%2B23%2C770%20%2B23%2C690&text=7%20and%20schedule%201%20of,2029%20to2030%202025&text=the%20NICs%20Act,Yield%20(%C2%A3%200%20%2B23%2C770%20%2B23%2C690&text=the%20NICs%20Act,2029%20to2030%202025)
11. [Changes to National Insurance contributions from 6 April 2024 at 1](https://www.gov.uk/government/publications/changes-to-national-insurance-contributions-from-6-april-2024/reduction-to-the-main-rates-of-primary-class-1-and-class-4-national-insurance-contributions#:~:text=HM%20Revenue%20%26%20Customs%20Policy,to%208%25%20from%206%20April&text=HM%20Revenue%20%26%20Customs%20Policy,points%20from%2010%25&text=paper%20Reduction%20to,to%208%25%20from%206%20April&text=paper%20Reduction%20to,points%20from%2010%25)
12. [Changes to National Insurance contributions from 6 January 2024 at 6](https://www.gov.uk/government/publications/changes-to-national-insurance-contributions-from-6-january-2024/a-reduction-in-the-main-rates-of-primary-class-1-and-class-4-national-insurance-contributions-and-the-removal-of-the-requirement-to-pay-class-2-nation#:~:text=(Contributions)%20Regulations%202001%20to%20specify,found%20in%20the%20policy%20costings&text=(Contributions)%20Regulations%202001%20to%20specify,details%20can%20be&text=that%20Step%202,found%20in%20the%20policy%20costings&text=that%20Step%202,details%20can%20be)
13. [Changes to National Insurance contributions from 6 January 2024 at 5](https://www.gov.uk/government/publications/changes-to-national-insurance-contributions-from-6-january-2024/a-reduction-in-the-main-rates-of-primary-class-1-and-class-4-national-insurance-contributions-and-the-removal-of-the-requirement-to-pay-class-2-nation#:~:text=This%20measure%20was%20announced%20at,Security%20Administration%20(Northern%20Ireland)%20Act&text=This%20measure%20was%20announced%20at,of%20the%20Social&text=Autumn%20Statement%202023,Security%20Administration%20(Northern%20Ireland)%20Act&text=Autumn%20Statement%202023,of%20the%20Social)
14. [Changes to National Insurance contributions from 6 January 2024 at 4](https://www.gov.uk/government/publications/changes-to-national-insurance-contributions-from-6-january-2024/a-reduction-in-the-main-rates-of-primary-class-1-and-class-4-national-insurance-contributions-and-the-removal-of-the-requirement-to-pay-class-2-nation#:~:text=to%20contributory%20bene%20fi%20ts,access%20to%20contributory%20bene%20fi&text=to%20contributory%20bene%20fi%20ts,voluntarily%20to%20get&text=including%20the%20State,access%20to%20contributory%20bene%20fi&text=including%20the%20State,voluntarily%20to%20get)
15. [Changes to National Insurance contributions from 6 January 2024 at 3](https://www.gov.uk/government/publications/changes-to-national-insurance-contributions-from-6-january-2024/a-reduction-in-the-main-rates-of-primary-class-1-and-class-4-national-insurance-contributions-and-the-removal-of-the-requirement-to-pay-class-2-nation#:~:text=4DU%2C%20or%20email%3A%20psi%40nationalarchives,will%20also%20retain%20access%20to&text=4DU%2C%20or%20email%3A%20psi%40nationalarchives,Insurance%20contributions%20voluntarily%2C&text=Where%20we%20have,will%20also%20retain%20access%20to&text=Where%20we%20have,Insurance%20contributions%20voluntarily%2C)
16. [National Insurance Manual - NIM25040 - Class 3 NICs: deficiency notices: contents at 1](https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim25040#:~:text=National%20Insurance%20Manual%20NIM25040%20%2D,(inclusive)%20Previous%20page%20Next%20page&text=National%20Insurance%20Manual%20NIM25040%20%2D,rates%20for%201996%2D97&text=Class%203%20NICs,(inclusive)%20Previous%20page%20Next%20page&text=Class%203%20NICs,rates%20for%201996%2D97)