How it's calculated
Employees and employers: Class 1
Class 1 National Insurance is worked out separately for every pay period, on that period's pay only. There is no year-to-date catch-up for most employees, so the thresholds that matter are the weekly or monthly ones.HMRC
| 2026/27 threshold | Per week | Per month | Per year |
|---|---|---|---|
| Lower earnings limit (counts for your record) | £129 | £559 | £6,708 |
| Primary threshold (employee NI starts) | £242 | £1,048 | £12,570 |
| Secondary threshold (employer NI starts) | £96 | £417 | £5,000 |
| Upper earnings limit | £967 | £4,189 | £50,270 |
- Employee (category A): 8% between the primary threshold and the upper earnings limit, 2% above. Category B (married women's reduced rate) pays 1.85% in the main band; category C (over State Pension age) pays nothing.
- Employer: 15% on pay above the secondary threshold. For under-21s (M), apprentices under 25 (H) and qualifying veterans (V) the employer pays 0% up to the upper secondary threshold, which equals the upper earnings limit.GOV.UK (HMRC)
Fortnightly and 4-weekly pay use the weekly thresholds multiplied by 2 and 4. Results are rounded to the nearest penny, with exactly half a penny rounded down.
Self-employed: Class 4 and Class 2
Class 4 is 6% on annual profits between £12,570 and £50,270, and 2% above. With profits of £7,105 or more, Class 2 is treated as paid; below that you can pay it voluntarily at £3.65 a week.GOV.UK
The formula
- Employee NI per period = main rate × (min(pay, UEL) − PT, if positive) + upper rate × (pay − UEL, if positive).
- Employer NI per period = 15% × (pay − ST, if positive), or 15% × (pay − UST, if positive) for categories H, M and V.
- Yearly figure = per-period figure × number of pay periods (52, 26, 13 or 12).
- Class 4 = 6% × (profits between the limits) + 2% × (profits above the upper limit).
Worked example
GOV.UK's example is a category A employee earning £1,000 in a week, who pays £58.66.GOV.UK On a £35,000 salary paid monthly you pay £149.49 a month (£1,794 a year) and your employer pays £4,499 a year.
| 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 |
A sole trader with £35,000 of profits pays £1,345.80 of Class 4.
| Line | Year |
|---|---|
| Profits | £35,000.00 |
| Class 4 at 6% (£12,570 to £50,270) | £1,345.80 |
| Class 4 at 2% (over £50,270) | £0.00 |
| Class 2 (treated as paid) | £0.00 |
| Total National Insurance | £1,345.80 |
Assumptions and limitations
- Equal pay every period. Bonuses and overtime are charged in the period they are paid.
- Company directors normally use an annual earnings period instead; the dividend tax calculator applies it.
- Freeport, Investment Zone and deferment categories (D, E, F, I, J, K, L, N, S, Z) are not covered.
- The £10,500 Employment Allowance reduces an employer's total bill across all staff, so it is not applied per employee here.