Small Business Accountants

How do I pay national insurance?

National Insurance contributions fund your state pension and benefit entitlements. Employees pay Class 1 through PAYE, deducted automatically from wages. Self-employed workers pay Class 2 at a flat weekly rate and Class 4 as a percentage of profits, both collected through Self Assessment. Limited company directors pay Class 1 via PAYE on their salary. Voluntary Class 3 contributions fill gaps in your NI record.

By Jordan Macey MAAT Reviewed by Noor Fiaz Updated 16 Apr 2026 1

Key takeaways

Employees pay Class 1 National Insurance at 8% on earnings between the primary threshold of 12,570 and 50,270, then 2% on earnings above that, deducted automatically through PAYE each pay period.
Self-employed workers pay Class 2 NI at 3.45 per week for 2024/25, though most are effectively exempt under the NIC reform, plus Class 4 at 6% on profits between 12,570 and 50,270.
Limited company directors are classed as employees for NI purposes and pay Class 1 contributions through their company payroll using PAYE, calculated on an annual earnings period basis.
For 2024/25 the primary threshold is 12,570 per year, matching the income tax personal allowance. Earnings below this level do not attract employee National Insurance, though the lower earnings limit of 6,396 still builds pension credits.
Voluntary Class 3 contributions cost 17.45 per week for 2024/25 and let you fill gaps in your National Insurance record to protect your entitlement to the full state pension.

How you pay your National Insurance contributions depends on your employment status.

If you’re an employee, your National Insurance contributions are deducted from your wages before you receive your salary. Your contributions are reflected in your payslip.

If you’re a limited company director, you may also be an employee (at your own company). As such, you pay Class 1 National Insurance through your PAYE payroll.

If you’re self-employed, you pay Class 2 and Class 4 National Insurance depending on your profits. The majority of self-employed workers pay National Insurance through Self Assessment.

If you’re employed and self-employed, your Class 1 National Insurance will be deducted through your wages. You may also need to pay Class 2 and Class 4 National Insurance depending on your self-employed profits.

Frequently asked questions

How do employees pay National Insurance?

Employees pay Class 1 National Insurance contributions, which their employer deducts automatically from each pay packet through PAYE. For 2024/25 the employee rate is 8% on earnings between 12,570 and 50,270 per year, then 2% on anything above. Your employer also pays Class 1 secondary contributions at 13.8% on earnings above 9,100. You do not need to do anything yourself because PAYE handles the calculation and payment.

How do self-employed people pay National Insurance?

Self-employed workers pay two classes of NI through their annual Self Assessment tax return. Class 2 is a flat rate of 3.45 per week for 2024/25, though most self-employed earners are now effectively exempt under NIC reform while still building state pension credits. Class 4 is charged at 6% on profits between 12,570 and 50,270, then 2% above. HMRC collects both amounts alongside your income tax bill.

What are the different National Insurance classes?

There are four main classes. Class 1 is paid by employees and employers through PAYE. Class 2 is a flat weekly charge for self-employed earners above the small profits threshold. Class 4 is a percentage of self-employed profits collected through Self Assessment. Class 3 is a voluntary contribution anyone can make to fill gaps in their NI record. Each class serves a different purpose and applies to different groups of workers.

What is the Class 2 National Insurance rate?

The Class 2 rate for 2024/25 is 3.45 per week. However, following NIC reform most self-employed people with profits above the small profits threshold of 6,725 are no longer required to pay Class 2 and still receive a National Insurance credit towards their state pension. Those with profits below the threshold can choose to pay voluntarily to protect their contribution record. Payment is collected through Self Assessment.

What is the Class 4 National Insurance rate and thresholds?

For 2024/25 Class 4 National Insurance is charged at 6% on annual profits between the lower profits limit of 12,570 and the upper profits limit of 50,270. Profits above 50,270 are charged at 2%. HMRC calculates your liability when you file your Self Assessment tax return, and the amount is due alongside your income tax on 31 January following the end of the tax year. No Class 4 is due on profits below 12,570.

Do limited company directors pay National Insurance?

Yes. Directors are treated as employees for National Insurance purposes and pay Class 1 contributions on salary drawn from the company through PAYE. HMRC applies an annual earnings period, so the primary threshold for 2024/25 is 12,570 for the full year regardless of pay frequency. Dividends are not subject to National Insurance. Many directors set their salary at or near the primary threshold to minimise NI while retaining a qualifying year for state pension.

Can I pay voluntary National Insurance contributions?

Yes. Class 3 voluntary contributions cost 17.45 per week for 2024/25 and allow you to fill gaps in your National Insurance record. You typically need 35 qualifying years to receive the full new state pension. You can check your record through your HMRC personal tax account and pay for gaps going back up to six years. Contact HMRC before paying to confirm which years are worth filling, because some gaps may already be covered by credits.

What is the National Insurance threshold for 2024/25?

The primary threshold for employees is 12,570 per year for 2024/25, which matches the income tax personal allowance. You do not pay Class 1 NI on earnings below this amount. The secondary threshold for employers is 9,100, above which they pay 13.8%. For self-employed workers the lower profits limit for Class 4 is also 12,570. From April 2025, employers will pay 15% on earnings above a reduced threshold of 5,000.