What Is National Insurance?
National Insurance (NI) is a tax on earnings paid by both employees and employers in the UK. It funds key state benefits including the State Pension, the NHS, Jobseeker's Allowance, and other welfare benefits. National Insurance contributions (NICs) are collected by HMRC alongside income tax through the PAYE system.
Unlike income tax, National Insurance is separate from general taxation and is theoretically linked to building up your entitlement to state benefits. You need 35 qualifying years of NI contributions for the full new State Pension (£221.20 per week in 2026/26).
💷 Calculate your NI: Use our UK salary calculator to see exactly how much National Insurance you'll pay on your salary, alongside income tax and your take-home pay.
Employee National Insurance Rates 2026/26
As an employee (Class 1 contributor), you pay National Insurance on your earnings above the Primary Threshold:
| Earnings | NI Rate (Employee) | Weekly Equivalent |
|---|---|---|
| Up to £12,570 per year | 0% | Up to £242/week |
| £12,571 – £50,270 per year | 8% | £242 – £967/week |
| Over £50,270 per year | 2% | Over £967/week |
Employer National Insurance
Your employer pays secondary Class 1 NIC at 15% on your earnings above £5,000 per year (£96.15/week) from April 2026. This is a cost to your employer and does not come out of your take-home pay — but it's important to understand as it affects your employer's total cost of employing you.
National Insurance Thresholds 2026/26
| Threshold | Annual | Monthly | Weekly |
|---|---|---|---|
| Lower Earnings Limit (LEL) | £6,396 | £533 | £123 |
| Primary Threshold (employee starts paying) | £12,570 | £1,048 | £242 |
| Upper Earnings Limit (UEL) | £50,270 | £4,189 | £967 |
How Much NI Will I Pay?
NI Calculation Examples
£25,000 salary:
- Earnings above threshold: £25,000 − £12,570 = £12,430
- NI at 8%: £12,430 × 8% = £994.40/year (£82.87/month)
£55,000 salary:
- Standard rate portion: (£50,270 − £12,570) × 8% = £3,016
- Upper rate portion: (£55,000 − £50,270) × 2% = £94.60
- Total NI: £3,110.60/year
Who Pays National Insurance?
- Employees (Class 1) – automatically deducted via PAYE
- Self-employed (Class 2 & 4) – paid via Self Assessment. See our self-employed tax guide
- Voluntary (Class 3) – to fill gaps in your NI record for State Pension purposes
Who Does NOT Pay National Insurance?
- Workers under 16 years old
- Workers who have reached State Pension age (currently 66)
- Anyone earning below £12,570 per year
NI and the State Pension
Every year you earn above the Lower Earnings Limit (£6,396) counts as a qualifying year for your State Pension, even if you don't actually pay NI contributions (because you earn below £12,570). You need:
- 10 qualifying years for any State Pension
- 35 qualifying years for the full new State Pension (£221.20/week in 2026/26)
Recent Changes to National Insurance
National Insurance rates have changed significantly in recent years:
| Tax Year | Employee NI Rate (standard band) |
|---|---|
| 2022/23 | 13.25% |
| 2023/24 | 12% |
| 2024/25 | 10% |
| 2026/26 | 8% |
Calculate Your National Insurance
See your exact NI contributions with our free UK salary calculator.
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