What is National Insurance?
National Insurance (NI) is a tax on earnings that funds the state pension, NHS, and benefits system. Almost everyone who works pays NI, but the rates and thresholds differ depending on whether you're employed, self-employed, or an employer.
Employee National Insurance 2025/26
| Earnings | NI Rate |
|---|---|
| Up to £12,570 (Primary Threshold) | 0% |
| £12,571 to £50,270 (Upper Earnings Limit) | 8% |
| Above £50,270 | 2% |
Employer National Insurance 2025/26
Employers pay NI on top of your salary — it's an additional cost that doesn't come out of your pay. For 2025/26, employers pay 13.8% on earnings above £5,000 (the secondary threshold). This is why the true cost of an employee is significantly more than their salary.
Self-Employed National Insurance
Self-employed people pay two classes of NI:
Class 2: £3.45 per week (if profits above £12,570)
Class 4: 6% on profits between £12,570 and £50,270, then 2% above
Self-employed NI rates are lower than employee rates, but you also don't get employer NI contributions.
NI and Your State Pension
You need 35 qualifying years of NI contributions to get the full state pension (currently £221.20 per week). You need at least 10 years to get anything. You can check your NI record on the government website to see how many qualifying years you have.
Do I Pay NI on My Pension or Savings?
No. NI is only charged on earned income (employment or self-employment). Pension income, rental income, dividends, and savings interest are all NI-free. This is one reason why taking income as dividends through a limited company can be tax-efficient.
See your full tax and NI breakdown
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