National Insurance is a UK tax that helps fund state benefits like the NHS, pensions, and maternity allowance. If you're employed or self-employed, you may need to pay NICs depending on your income and status.

 

National Insurance for Employed Individuals

• NICs are automatically deducted through PAYE by your employer

• You pay Class 1 NICs based on your weekly or monthly earnings

• Contributions help build entitlement to the State Pension and other benefits

• You stop paying NICs once you reach State Pension age

 

National Insurance for Self-Employed Individuals

• You pay NICs through your Self Assessment tax return

• NICs are based on your annual profits after expenses

• There are two types of NICs for self-employed people:

  • Class 2 NICs (voluntary for low earners)

  • Class 4 NICs (mandatory above a profit threshold)

 

NIC Rates for Self-Employed (2025/26)

• Class 2 NICs:

  • Voluntary if profits are below £6,725

  • Automatically credited if profits are between £6,725 and £12,570

  • Rate: £3.50 per week (voluntary)

• Class 4 NICs:

  • 6% on profits between £12,570 and £50,270

  • 2% on profits above £50,270

  • Not payable if profits are below £12,570

 

NICs and CIS Subcontractors

If you're paid under the Construction Industry Scheme (CIS):

• CIS deductions cover Income Tax only, not NICs

• You must still pay Class 4 NICs on your profits

• If your profits are low, consider voluntary Class 2 NICs to protect your State Pension

• NICs are calculated and paid through your Self Assessment tax return

 

Why NICs Matter

• They build your entitlement to:

  • State Pension

  • Maternity Allowance

  • Employment and Support Allowance

• You need at least 10 qualifying years to receive any State Pension

• You need 35 qualifying years for the full State Pension

• Voluntary contributions can help fill gaps in your record

 

How can we Supports You

• Register for Self Assessment and track NIC obligations

• Calculate and file Class 4 NICs accurately

• Advise on voluntary Class 2 contributions

• Reconcile CIS deductions and ensure full compliance

• Review your NIC record and protect your future benefits

 

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