Employee Class 1 rates
| Annual earnings | Weekly | Monthly | Rate |
|---|---|---|---|
| Up to £12,570 | Up to £242 | Up to £1,048 | 0% |
| £12,570 – £50,270 | £242 – £967 | £1,048 – £4,189 | 8% |
| Over £50,270 | Over £967 | Over £4,189 | 2% |
National Insurance is calculated on each pay period separately, not on your annual income. A one-off bonus can therefore push a single month into the upper rate.
How much National Insurance you pay
Employee NI and the employer NI your company pays on top, per year:
Employer National Insurance
Employers pay secondary Class 1 contributions of 15% on each employee's earnings above £5,000 a year. This does not come out of your pay, but it is part of what you cost your employer.
Salary sacrifice arrangements, for example for pensions, reduce both your NI and your employer's, which is why many employers offer them.
Self-employed National Insurance
Self-employed people pay Class 4 National Insurance on profits through Self Assessment: 6% between £12,570 and £50,270 and 2% above. Class 2 contributions are no longer compulsory.
What National Insurance pays for
National Insurance builds your entitlement to the State Pension and some benefits, such as contribution-based Jobseeker's Allowance and Employment and Support Allowance. You usually need 35 qualifying years for the full new State Pension.
How NI is worked out on a monthly payslip
Your employer uses monthly thresholds. On a £3,000 monthly salary: (£3,000 − £1,047.50) × 8% = £156.20 of National Insurance.
Because each pay period is assessed separately, a bonus month can be charged more than you would pay on the same income spread over the year. Unlike Income Tax, overpaid NI is rarely refunded for a single employment.
National Insurance category letters
- A: most employees.
- M: employees under 21 (no employer NI up to the upper limit).
- H: apprentices under 25 (no employer NI up to the upper limit).
- C: employees over State Pension age, who pay no employee NI.
- J: employees who already pay NI in another job and can defer.
Frequently asked questions
What is the National Insurance rate for 2026/27?
8% on earnings between £12,570 and £50,270, and 2% above.
Do I pay National Insurance after State Pension age?
No. Employees stop paying Class 1 National Insurance once they reach State Pension age, although employers still pay.
Does a pension contribution reduce National Insurance?
Only if it is made through salary sacrifice. Other workplace pension contributions reduce Income Tax but not NI.
How is National Insurance calculated each month?
On the part of your monthly pay above £1,047.50, at 8%, and 2% on pay above £4,189.17.
What is NI category letter A?
The standard category for most employees.
Figures use HMRC 2026/27 Income Tax bands (including Scottish rates), Class 1 National Insurance and student loan thresholds for an employee paid through PAYE. Read our methodology. Last updated September 25, 2026. Estimates for information only, not tax advice.