National Insurance when you're self-employed: what you actually pay

You probably aren't paying Class 2 any more

If your profits are at or above the Small Profits Threshold, currently £7,105, you don't pay Class 2 National Insurance. HMRC treats it as having been paid and credits your record anyway. Its self-employed National Insurance rates page puts it flatly: "you do not have to pay Class 2 contributions".

That changed from April 2024, and a lot of what's still online hasn't caught up. If you've read that self-employment costs you a few pounds a week on top of your tax, that advice is describing a charge that no longer exists for most people. You'll still see Class 2 mentioned on your return, because the record entry is still being made. There just isn't a payment attached to it.

Worth being clear about what didn't change: the credit only reaches your record if HMRC knows you're self-employed. Registering is what connects the two. Trade without registering and there's nothing to credit.

Class 4 is the one that comes out of your profit

Class 4 is the National Insurance a sole trader pays, and it runs on profit rather than turnover. For 2026/27 the rate is 6% on profits between £12,570 and £50,270. Above £50,270 it drops to 2%.

It isn't a separate bill with its own deadline. Class 4 is worked out on your Self Assessment return and paid in the same lump as your income tax, on the same dates. No second letter arrives and no second payment needs planning for. The effect is simply that the January total is bigger than a quick income tax sum suggests, which is where it catches people.

The other thing to watch is the word profit. Class 4 is charged on what's left after your allowable expenses, not on what clients paid you. Every legitimate expense you record reduces the figure Class 4 is charged on, in exactly the same way it reduces your income tax. An unclaimed expense costs you twice.

What a qualifying year is for

A National Insurance record isn't an account with a balance. It's a count of qualifying years, and qualifying years are what the State Pension is built from.

You need 10 qualifying years on your record to get any new State Pension at all, and more than that for the full amount. According to gov.uk, a year counts if you were working and paying National Insurance, getting National Insurance credits, or paying voluntary contributions.

That's what the Class 2 credit does. A year of self-employment above the threshold puts a qualifying year on your record without costing you anything. It happens on its own, which is why most people never find out it's happening.

The low-profit year is where there's a decision to make

Below £7,105, the credit stops being automatic and becomes a choice. It's worth knowing about in advance, because a first year, a career switch, a long gap between contracts or a year mostly spent on parental leave can all land under the threshold without feeling like a bad year.

You have two ways to fill that gap voluntarily, and they cost very different amounts:

• Voluntary Class 2, open to you because you're self-employed. The rate for 2026/27 is £3.65 a week.
• Class 3, the general-purpose voluntary contribution anyone can pay. The rate is £18.40 a week.

Both buy the same thing: one qualifying year on your record. Class 3 is the option people are usually pointed at, because it's the one that applies to everyone, and it's roughly five times the weekly rate. If you're eligible for voluntary Class 2, paying Class 3 instead is an expensive way to buy something you could have had cheaply. Both rates are on the gov.uk voluntary contributions page.

Before you pay anything, check two free things. Your National Insurance record shows which years already count and which have gaps. Your State Pension forecast shows whether filling a particular gap would change what you get. Sometimes it wouldn't, and then there's nothing to buy.

Scotland, Wales and Northern Ireland

National Insurance is set once for the whole UK. The Class 4 rates and thresholds above are the same in Cardiff, Belfast, Glasgow and Bristol.

Income tax isn't. Scotland sets its own bands and rates, and they don't match the rest of the UK. So if you're a Scottish taxpayer, the National Insurance half of this article applies to you unchanged and the income tax half of any calculator you use needs to be the Scottish one. It's a common way to get a tax estimate wrong by a meaningful amount.

The bottom line

For most self-employed people the whole of National Insurance now comes down to one line: Class 4, charged on profit, paid through Self Assessment with everything else. Class 2 is a record entry rather than a bill.

The low-profit year is the part worth a diary note, because it's the only time the system asks you to do anything. Look at your National Insurance record and your State Pension forecast together. If there's a gap worth filling, find out whether voluntary Class 2 is open to you, since it's the cheaper of the two routes to the same year.