Class 4 National Insurance

Class 4 NI and Your Self-Employment Profits

Class 4 National Insurance is the main NI contribution for self-employed workers, charged on profits between £12,570 and £50,270 at 6%, and at 2% on profits above £50,270. Unlike Class 1 NI for employees, Class 4 does not count towards benefit entitlements.

On self-employment profits of £40,000, your Class 4 NI would be approximately £1,646 per year (6% of £27,430). This is lower than the 8% rate employees pay, which is one reason self-employment can be slightly more tax-efficient for some workers.

Class 4 NI is paid through self-assessment alongside your income tax, typically in January and July payments on account. See our self-employed calculator for a full breakdown.

How Class 4 Ni Works in Practice

Class 4 National Insurance is paid by self-employed workers on their profits. The rates for 2025/26 are 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270. Class 4 NI does not directly build State Pension entitlement (that comes from Class 2 or employment records) — it is essentially a profit tax similar to employee NI.

Practical Tips

Class 4 NI is calculated and paid through your self-assessment tax return. On self-employed profits of £40,000, your Class 4 NI would be approximately £1,646 (6% on £27,430 between the thresholds). This is lower than the 8% employee NI rate, which is one of the tax advantages of self-employment. However, self-employed workers do not receive employer NI contributions towards their pension or access to statutory sick pay and other employment benefits.

Related Topics

The combined self-employed tax burden (income tax + Class 4 NI) is lower than the combined employed burden (income tax + employee NI + employer NI paid on your behalf). However, employed workers receive additional benefits (pension contributions, holiday pay, sick pay) that offset this difference. See self-employed calculator.