PaychecklyNational Insurance Explained
National Insurance is the second-biggest deduction from your pay after Income Tax — but it works on completely different thresholds, and few people know exactly how much they pay or why. Here's the full picture for 2026/27.
How much National Insurance you pay
As an employee, you pay Class 1 National Insurance on your earnings. For 2026/27 the rates are:
| Earnings band | Annual range | NI rate |
|---|---|---|
| Below the Primary Threshold | Up to £12,570 | 0% |
| Main rate | £12,570 – £50,270 | 8% |
| Above the Upper Earnings Limit | Over £50,270 | 2% |
So you pay nothing on the first £12,570, then 8% on the slice up to £50,270, then just 2% on everything above that.
Worked examples
| Salary | Annual NI | Monthly NI |
|---|---|---|
| £20,000 | £594 | £50 |
| £30,000 | £1,394 | £116 |
| £40,000 | £2,194 | £183 |
| £50,000 | £2,994 | £250 |
| £70,000 | £3,409 | £284 |
| £100,000 | £4,009 | £334 |
Notice how NI barely rises between £50,000 and £100,000 — that's because earnings above £50,270 are only charged at 2%. National Insurance is mildly regressive at the top, the opposite of Income Tax.
The thresholds in other periods
HMRC expresses the same thresholds weekly and monthly for payroll:
| Threshold | Weekly | Monthly | Yearly |
|---|---|---|---|
| Primary Threshold (8% starts) | £242 | £1,048 | £12,570 |
| Upper Earnings Limit (drops to 2%) | £967 | £4,189 | £50,270 |
What National Insurance actually pays for
Unlike Income Tax, NI is tied to your entitlement to certain benefits. Your record of NI contributions (and credits) determines:
- Your State Pension — you generally need 35 qualifying years for the full new State Pension, and at least 10 years to get anything.
- Contribution-based benefits — such as contribution-based Jobseeker's Allowance and Employment and Support Allowance.
- Maternity Allowance and bereavement support.
This is why earning at least a little — even below the tax threshold — can matter: salaries above the Lower Earnings Limit (£6,396) build State Pension entitlement even when no NI is actually deducted.
Self-employed National Insurance
If you're self-employed you pay Class 4 NI instead — 6% on profits between £12,570 and £50,270, and 2% above. Class 2 NI has been effectively abolished from 2024, though very low earners can pay it voluntarily to protect their State Pension. See our PAYE vs self-employed comparison.
Can you reduce your National Insurance?
- Salary sacrifice is the main lever — sacrificing salary into a pension reduces the earnings NI is charged on, saving both employee and employer NI. See our salary sacrifice guide.
- Check your NI record on gov.uk — gaps can sometimes be filled with voluntary contributions to boost your State Pension, which is often excellent value.
General information for the 2026/27 tax year, not financial advice. NI examples are annual approximations; actual deductions are calculated per pay period and may differ slightly. Check your State Pension forecast and NI record at gov.uk.