National Insurance is the second big deduction on a UK payslip, after Income Tax. It works differently from Income Tax in almost every way: it ignores your tax code, stops when you reach State Pension age, is the same in Scotland as in England, and is worked out on each payslip on its own rather than over the year.
Employers pay it too, at a higher rate than you do. This guide covers both sides for the 2026/27 tax year (6 April 2026 to 5 April 2027), using the thresholds HMRC publishes. The National Insurance calculator works out yours per payslip and per year.
The short version
- Employees pay 8% on earnings between £12,570 and £50,270 a year, and 2% above that.
- Employers pay 15% on earnings above £5,000 a year, with no upper limit.
- The self-employed pay Class 4 instead: 6% and 2% on profits.
- The rates are the same in England, Scotland, Wales and Northern Ireland.HMRC
£149.49
- Employee NI per year
- £1,794
- Employer NI per payslip
- £374.95
- Employer NI per year
- £4,499
- Class 4 per year
- £0.00
- Class 2 per year
- £0.00
- Total NI per year
- £6,293
- Class 1 is worked out on each month's pay on its own, using the monthly thresholds, so a bonus month can cost more NI than the same money spread over the year.
- Employers may be able to cut their bill with the £10,500 Employment Allowance (not applied here).
Your National Insurance: £149.49 per month (category A, 2026/27)
Show the breakdown
| Line | Per month | Year |
|---|---|---|
| Pay | £2,916.67 | £35,000.00 |
| Employee: 8% from £1,048.00 to £4,189.00, 2% above | £149.49 | £1,793.88 |
| Employer: 15% above £417.00 | £374.95 | £4,499.40 |
| Total Class 1 | £524.44 | £6,293.28 |
- Employee£1,79429%
- Employer£4,49971%
The thresholds for 2026/27
Employee and employer National Insurance (Class 1) is built on four thresholds. Payroll uses the weekly or monthly figure that matches how often you are paid.GOV.UK
| Threshold | Per week | Per month | Per year | What it does |
|---|---|---|---|---|
| Lower earnings limit (LEL) | £129 | £559 | £6,708 | Earn this much and the year counts towards your State Pension |
| Secondary threshold (ST) | £96 | £417 | £5,000 | Employer NI starts |
| Primary threshold (PT) | £242 | £1,048 | £12,570 | Employee NI starts |
| Upper earnings limit (UEL) | £967 | £4,189 | £50,270 | Employee rate drops to the lower rate |
The primary threshold matches the Income Tax Personal Allowance, and the upper earnings limit matches the point where higher-rate Income Tax starts for someone on the standard tax code. That makes the two easy to remember together.
What employees pay
Most employees are in category A. You pay nothing on earnings up to the primary threshold, the main rate on earnings between the primary threshold and the upper earnings limit, and the lower rate on everything above. Here is what that means over a year, paid monthly:
| Salary | Per month | Per year |
|---|---|---|
| £25,000 | £82.83 | £994 |
| £35,000 | £149.49 | £1,794 |
| £50,000 | £249.49 | £2,994 |
| £60,000 | £267.50 | £3,210 |
| £80,000 | £300.83 | £3,610 |
Look at how little the bill grows between £60,000 and £80,000. Above the upper earnings limit only the lower rate applies, so National Insurance takes a much smaller share of each extra pound than Income Tax does.
National Insurance is charged on your gross pay after any salary sacrifice. A pension taken under a net pay arrangement reduces your Income Tax but not your National Insurance.
Why NI is worked out per payslip
Income Tax is cumulative: payroll looks at your pay and tax for the whole year so far. National Insurance is not. Each pay period stands alone, and the thresholds for that period are applied to that period’s pay.HMRC
This has a few practical effects:
- Weekly and monthly pay give slightly different totals. On £35,000 a year, you pay £1,793 paid weekly against £1,794 paid monthly, because 52 weekly thresholds do not add up exactly to the yearly ones.
- A bonus month costs less NI than you might expect. Pay above the monthly upper earnings limit of £4,189 is charged at only 2%, so most of a big one-off payment falls in the lower rate.
- Irregular earnings can cost more. If you earn nothing one month and double the next, you lose the benefit of the primary threshold in the empty month. NI is not refunded at the end of the year the way an Income Tax overpayment would be.
If you have two jobs with different employers, each one applies the thresholds separately. Two part-time jobs can therefore mean less National Insurance in total than one full-time job on the same combined pay, while your Income Tax allowance only goes against one of them.
Company directors are the exception: their National Insurance is worked out on an annual earnings period, so timing tricks don’t change their bill.
A payslip worked through
Here is the calculation for one month on a £35,000 salary, category A. Payroll takes the monthly pay, removes the part below the monthly primary threshold of £1,048, and charges the main rate on the rest, because the pay is under the monthly upper earnings limit. The employer side starts lower, at the monthly secondary threshold of £417.
| Line | Per month | Year |
|---|---|---|
| Pay | £2,916.67 | £35,000.00 |
| Employee: 8% from £1,048.00 to £4,189.00, 2% above | £149.49 | £1,793.88 |
| Employer: 15% above £417.00 | £374.95 | £4,499.40 |
| Total Class 1 | £524.44 | £6,293.28 |
The calculator rounds each payslip to the penny, as payroll software does, and the yearly figure is simply twelve monthly payslips added together.
What employers pay
On top of your salary, your employer pays secondary Class 1 National Insurance at 15% on everything you earn above the secondary threshold. There is no upper limit and it doesn’t appear on your payslip.
| Salary | Employer NI per year |
|---|---|
| £25,000 | £2,999 |
| £35,000 | £4,499 |
| £50,000 | £6,749 |
| £80,000 | £11,249 |
On a £35,000 salary, your employer pays more National Insurance than you do: £4,499 against your £1,794.
Two reliefs reduce the employer bill:
- Employment Allowance. Eligible employers can take up to £10,500 a year off their employer National Insurance. A company whose only employee paid above the secondary threshold is a director cannot claim it.GOV.UK
- Lower rates for some employees. For employees under 21, apprentices under 25 and armed forces veterans in their first civilian job, the employer pays nothing on earnings up to £50,270 a year. Freeport and Investment Zone employers get a similar relief up to £25,000.
Category letters
Your category letter is printed on your payslip. It tells payroll which rates to use. The most common ones are:GOV.UK
| Letter | Who | Employee main rate | Employer |
|---|---|---|---|
| A | Most employees | 8% | 15% above the secondary threshold |
| B | Married women and widows with a valid reduced-rate election | 1.85% | 15% above the secondary threshold |
| C | Over State Pension age | 0% | 15% above the secondary threshold |
| H | Apprentices under 25 | 8% | Nothing up to £50,270, then 15% |
| M | Under 21 | 8% | Nothing up to £50,270, then 15% |
| V | Veterans in their first civilian job | 8% | Nothing up to £50,270, then 15% |
For letters H, M and V the employee still pays the normal rate; only the employer saves. A 20-year-old on £35,000 pays £1,794 a year, and their employer pays £0.
If you have reached State Pension age and your payslip still shows A, tell your employer: you should be on C, and your employee contribution should be £0.
Ways your NI bill can go down
The main legitimate way for an employee to pay less National Insurance is salary sacrifice. You give up part of your salary in return for a non-cash benefit, most often a bigger employer pension contribution, and National Insurance is charged on the lower salary.GOV.UK
On £50,000 with a 5% pension contribution, employee National Insurance is £2,994 under a net pay arrangement and £2,794 with salary sacrifice. Your employer saves too. The take-home pay calculator shows the full effect on your monthly pay.
Some things that cut your Income Tax do nothing for National Insurance. Pension contributions under a net pay arrangement or relief at source, Gift Aid donations and a higher tax code all leave your National Insurance unchanged, because it is worked out on your gross pay for the period, not on your taxable income. Salary sacrifice is different only because it lowers the gross pay itself, so check that your scheme really is salary sacrifice before you count on the saving.
If you are self-employed
Sole traders and partners don’t pay Class 1. Instead they pay Class 4 on their profits through Self Assessment: 6% on profits between £12,570 and £50,270, and 2% above.GOV.UK
On £35,000 of profit, Class 4 comes to £1,345.80, noticeably less than the £1,794 an employee pays on the same salary. Class 2 is no longer charged: with profits of at least £7,105 you are treated as having paid it, and below that you can choose to pay £3.65 a week to protect your State Pension. The self-employed tax guide covers the full bill.
What your contributions buy
National Insurance builds your entitlement to the State Pension and some other benefits, such as New Style Jobseeker’s Allowance and New Style Employment and Support Allowance. Each year in which you earn at least the lower earnings limit counts as a qualifying year, even if your pay is below the primary threshold and you pay nothing.GOV.UK
You can check your record and see any gaps in your HMRC online account.GOV.UK For how National Insurance fits with Income Tax, student loans and pensions on your payslip, read the UK take-home pay guide or see salary after tax for common salaries.
Figures are worked out from the 2026/27 rates published by HMRC and GOV.UK. They are estimates, not tax advice.
