How UK National Insurance is calculated (2026/27)

Employees pay Class 1 primary contributions from their wages. Employers pay Class 1 secondary contributions on top of those wages — that money never appears as a deduction from net pay. Self-employed people pay Class 4 on trading profits through Self Assessment. Mixing those three into one percentage is how people end up comparing the wrong numbers.

National Insurance is UK-wide. Scotland’s different Income Tax bands do not change these NI rates. That is why our take-home calculator still uses the same NI engine when you switch the tax region to Scotland.

For a typical category A employee in 2026/27, nothing is charged on earnings up to the Primary Threshold, 8% is charged between that threshold and the Upper Earnings Limit, and 2% is charged above the Upper Earnings Limit. Official tables are weekly and monthly because PAYE works per pay period. Our calculator annualises the commonly used yearly figures: Primary Threshold £12,570, Upper Earnings Limit £50,270.

Those yearly lines sit in the same place as the Income Tax Personal Allowance and the basic-rate limit, which is why people confuse the two taxes. The calculations are still separate. You can owe employee NI on a slice of pay that is inside the Personal Allowance, and you can owe Income Tax on a slice that has already dropped to the 2% NI rate.

GOV.UK’s own weekly illustration for category A: on £1,000 in a week you pay nothing on the first £242, 8% on the band up to £967, and 2% on the remainder — £58.66 that week. Our annual tool is the salary-level version of that idea, not a week-by-week payroll engine.

On £30,000, the whole slice above £12,570 is inside the 8% band: 8% × £17,430 = £1,394.40 a year (about £116 a month). Effective employee NI is 4.65% of the headline salary — not 8% of £30,000.

On £45,000 you are still under the Upper Earnings Limit. Employee NI is 8% × £32,430 = £2,594.40.

On £60,000 you cross £50,270. The 8% band is £50,270 − £12,570 = £37,700 → £3,016. The remaining £9,730 is charged at 2% → £194.60. Total £3,210.60. Crossing the Upper Earnings Limit therefore slows the extra NI, even while Income Tax may have jumped to 40% on that same slice.

From April 2025 the commonly published employer rate is 15% of earnings above a much lower Secondary Threshold — £5,000 a year in the annual model we use (£96 a week on the official table). On a £40,000 salary that is 15% × £35,000 = £5,250 a year. That is paid by the employer. It is not taken from the employee’s net pay.

If you are comparing the true cost of hiring, add employer NI (and pension) to gross pay. If you are comparing two job offers as an employee, ignore employer NI unless the employer is explaining a salary-sacrifice sharing arrangement.

Employment Allowance, freeports, veterans’ relief and some age-related category letters can reduce or remove employer NI. Those schemes are outside our calculator. Directors can also be assessed on an annual basis rather than a simple weekly table.

If you are self-employed with profits above £12,570 you pay Class 4: 6% on profits up to £50,270 and 2% above that in 2026/27. On £40,000 of profits that is 6% × £27,430 = £1,645.80 — the self-employed example in our calculator.

Class 2 is treated as paid for people with profits at or above the Small Profits Threshold (£7,105 in 2026/27), so most traders do not write a separate Class 2 cheque. Below that threshold you can pay voluntary Class 2 (£3.65 a week in 2026/27) to protect your National Insurance record. Our calculator focuses on the Class 4 profit charge.

Landlords, some examiners and people who only invest do not always sit in this Class 4 box. If that is you, use HMRC’s self-employed pages rather than a generic profits slider.

Salary sacrifice for a workplace pension usually lowers the cash earnings that employee and employer Class 1 are calculated on. That NI saving is often the extra reason people prefer sacrifice to a relief-at-source contribution of the same pounds. Model it on the salary sacrifice calculator rather than subtracting a pension percentage after the fact.

Student loan deductions use their own income thresholds and are not National Insurance. Stack them after you know tax and NI, or you will double-count the gap between gross and net.

Use the National Insurance calculator when you want employee, employer or self-employed NI on its own — for example a hiring cost or a Class 4 estimate. Use the take-home pay calculator when you want Income Tax and employee NI together. Switch region only if you need Scottish Income Tax; NI will stay the same.

If a payslip disagrees, the payslip wins. Category letters other than A, multiple jobs and directors’ annual earnings periods are the usual reasons.