Self-Employed National Insurance Calculator UK 2025
Calculate your Class 2 and Class 4 National Insurance contributions as a self-employed person or sole trader. See how much NI you owe for 2025/26, compare to employed NI, and check your State Pension qualifying years. Updated for 2025/26 rates: Class 2 at £3.45 per week and Class 4 at 9% on profits between £12,570 and £50,270.
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Self-Employed National Insurance UK 2025/26: Complete Guide
National Insurance for the self-employed works very differently from the employee NI system. As a sole trader, partner, or freelancer, you pay two types of NI contributions: Class 2 and Class 4. Both are calculated annually through your Self Assessment tax return and paid to HMRC alongside your income tax bill, rather than being deducted monthly from a payslip.
Understanding your NI obligations is important for two reasons: first, to budget correctly for your tax bill and avoid surprises when the January 31 payment deadline arrives; and second, to ensure you are building up your State Pension entitlement. Missing NI contributions could leave gaps in your National Insurance record that reduce your State Pension in retirement.
Class 2 National Insurance 2025/26
Class 2 NI is a flat weekly charge of £3.45 per week in 2025/26. If your self-employment profits are above the Small Profits Threshold of £12,570 per year, HMRC treats Class 2 NI as automatically satisfied through your Self Assessment return — you do not pay it as a separate, additional amount on top of Class 4, but it is counted as having been paid for benefit purposes.
If your profits are below £12,570 in 2025/26, you have two options. You can choose not to pay Class 2 NI, in which case you will not receive a qualifying year for the State Pension from self-employment that year. Alternatively, you can pay voluntary Class 2 NI at £3.45 per week (£179.40 per year for a full year) to protect your benefit entitlements. Given that a full new State Pension is worth £221.20 per week, paying voluntary Class 2 NI is almost always excellent value.
Class 2 NI matters for access to:
- The new State Pension (requires 35 qualifying years for full entitlement of £221.20/week)
- Contributory Employment and Support Allowance (if you become unable to work)
- Maternity Allowance
- Bereavement benefits
Class 4 National Insurance 2025/26
Class 4 NI is the main NI charge on self-employment profits. It is calculated as a percentage of your net profit and has two rates in 2025/26:
| Profit Band | Rate | Example (£35,000 profit) |
|---|---|---|
| Up to £12,570 (Lower Profits Limit) | 0% | £0 |
| £12,570 to £50,270 (Upper Profits Limit) | 9% | £2,025 (9% of £22,430) |
| Above £50,270 | 2% | N/A at this profit level |
Class 4 NI does not count towards your State Pension or any other benefit entitlement. It is purely a revenue-raising measure on self-employment income. Unlike employee NI, which contributes to your National Insurance record, Class 4 is simply a tax on profit.
How Self-Employed NI Compares to Employed NI
One of the most significant financial advantages of self-employment from a tax perspective is the lower NI burden. When you are employed, both you and your employer pay NI on your earnings. In 2025/26:
- Employee NI: 8% on earnings between £12,570 and £50,270, then 2% above £50,270
- Employer NI: 13.8% on earnings above the Secondary Threshold (£9,100 per year from April 2025)
On a salary of £35,000, an employee pays £1,794 in employee NI, while their employer pays £3,575 in employer NI — a combined NI cost of £5,369. A self-employed person with £35,000 profit pays Class 2 NI of approximately £179 plus Class 4 NI of approximately £2,025, for a total of £2,204. That is a saving of over £3,165 compared to the combined employee and employer NI cost, though self-employed people forego some employment rights and benefits in return.
Self-Employed NI and the State Pension
The new State Pension for 2025/26 is £221.20 per week (£11,502.40 per year). To receive the full amount, you need 35 qualifying years on your National Insurance record. A qualifying year is a tax year in which you either paid sufficient NI contributions or received NI credits (for example, when claiming certain benefits or looking after children and claiming Child Benefit).
You can check your NI record and State Pension forecast through the HMRC website or the government's Check Your State Pension service. If you have gaps in your record, you may be able to pay voluntary Class 3 NI contributions to fill them, though this costs considerably more than voluntary Class 2 (£17.45 per week for Class 3 in 2025/26 versus £3.45 for Class 2). This makes it extremely worthwhile for self-employed people with low profits to pay voluntary Class 2 rather than waiting and potentially needing to pay Class 3 later.
When Do You Pay Self-Employed NI?
Unlike employee NI, which is deducted from each payslip through PAYE, self-employed NI is paid annually through your Self Assessment tax return. Your Class 2 and Class 4 NI bill for a given tax year (April 6 to April 5) is due by January 31 following the end of that tax year. For example, NI for the 2025/26 tax year is due by January 31, 2027.
HMRC also requires payments on account — advance payments towards next year's tax and NI bill — due on January 31 and July 31 each year, if your previous year's bill was above £1,000. This means that in your first year of self-employment, you may face a large combined bill on January 31 covering both the previous year's NI and the first payment on account for the current year.
NI When You Are Both Employed and Self-Employed
If you have employment income in addition to self-employment profits, you will pay employee NI on your wages and Class 2 and Class 4 NI on your self-employment profits. There is an annual maximum NI contribution limit, and if your combined contributions exceed this, you can apply for deferral of Class 4 NI or claim a refund.
Your Class 2 NI position is straightforward — you pay (or are treated as having paid) Class 2 regardless of your employment NI. The complexity arises with Class 4 NI, where if your employment earnings have already taken you above the Upper Earnings Limit (£50,270), you only pay 2% Class 4 NI on your self-employment profits (rather than 9% up to that limit). This is calculated automatically through your Self Assessment return.
Reducing Your Self-Employed NI Bill
The primary way to reduce your self-employed NI is to legitimately reduce your taxable profit by claiming all allowable business expenses. HMRC permits deductions for expenses that are wholly and exclusively for business purposes, including:
- Office costs, including a proportion of home costs if you work from home
- Travel costs (excluding ordinary commuting)
- Equipment, tools, and machinery (possibly as capital allowances)
- Marketing and advertising costs
- Professional subscriptions and training relevant to your trade
- Accountancy and professional fees
- Stock and materials
Pension contributions to a personal pension or SIPP are deductible from your income tax (they reduce your income tax bill through basic rate relief claimed by the pension provider) but do not reduce your Class 4 NI on self-employment profits. This is different from the employed position, where salary sacrifice pension contributions can reduce both income tax and NI.
If your self-employment income is consistently high, it is worth discussing incorporation (forming a limited company) with an accountant. Paying yourself through a mix of salary and dividends can reduce overall NI, though from April 2023 corporation tax has increased to 25% for profits above £250,000, reducing some of the tax efficiency of this approach for very high earners.
Frequently Asked Questions: Self-Employed National Insurance
What is Class 2 National Insurance for the self-employed in 2025/26?
Class 2 National Insurance is a flat-rate contribution paid by self-employed people. In 2025/26 it is £3.45 per week. If your profits are above the Small Profits Threshold of £12,570 per year, Class 2 NI is treated as automatically paid through your Self Assessment tax return. If your profits are below £12,570, you can choose to pay it voluntarily to protect your entitlement to the State Pension and certain benefits. Class 2 NI counts as qualifying years for the State Pension — you need 35 qualifying years for a full new State Pension of £221.20 per week.
What are the Class 4 National Insurance rates for self-employed in 2025/26?
Class 4 NI is charged on self-employment profits above the Lower Profits Limit. In 2025/26, the rate is 9% on profits between £12,570 and £50,270 (the Upper Profits Limit), and 2% on profits above £50,270. Class 4 NI does not count towards your State Pension — only Class 2 does. On profits of £30,000, you would pay Class 4 NI of £1,566 (9% of £17,430). On profits of £60,000, you would pay £3,393 (9% of £37,700 plus 2% of £9,730).
How does self-employed NI compare to employed NI?
Self-employed people pay significantly less National Insurance than employees on the same income. An employee earning £40,000 pays employee NI of £2,194 per year, plus their employer pays £3,775 in employer NI — a combined cost of £5,969. A self-employed person with £40,000 profit pays Class 2 NI of approximately £179 plus Class 4 NI of £2,468, totalling £2,647 — a saving of over £3,300 compared to the combined employee and employer cost.
Do I pay NI on all my self-employment income?
No. Self-employed NI is calculated on your net profit after allowable business expenses, not your gross income. The Small Profits Threshold for Class 2 NI is £12,570 in 2025/26. The Lower Profits Limit for Class 4 NI is also £12,570 — you do not pay Class 4 NI on profits below this level. Additionally, if you also have employment income, both NI streams are calculated, and there are annual maximum limits to prevent overpayment.
Does paying self-employed NI qualify me for the State Pension?
Yes. Paying Class 2 NI counts as qualifying years for the new State Pension of £221.20 per week in 2025/26. You need 35 qualifying years for the full amount and at least 10 years to receive any pension. Class 4 NI does not count towards the State Pension. If your profits are below £12,570, consider paying voluntary Class 2 NI at £3.45 per week — it is extremely cost-effective compared to the pension entitlement it provides.
What happens to NI if I am both employed and self-employed?
If you have both employed income and self-employment profits, you pay employee NI on your wages and Class 2 and Class 4 NI on your self-employment profits. There is an annual maximum NI limit, and if your combined contributions exceed this, you can apply for deferral or a refund. Your Class 4 position is adjusted through Self Assessment — if your employment earnings have already taken you above the Upper Earnings Limit, you pay only 2% Class 4 NI on self-employment profits rather than 9%.
Can I reduce my self-employed NI bill legally?
Yes. The most effective way is to claim all allowable business expenses to reduce your taxable profit — including office costs, travel, equipment, marketing, and professional fees. Pension contributions reduce your income tax but not your Class 4 NI directly. For consistently high self-employment income, incorporating as a limited company and paying a mix of salary and dividends can reduce NI, though this involves additional administrative requirements and the 25% corporation tax rate applies to profits above £50,000 with marginal relief below £250,000.