National Insurance (NI) is a mandatory tax levied on UK workers which contributes towards a range of benefits, including state pensions, the NHS, maternity pay and even unemployment benefits. Though NI is mandatory, some workers won’t have to make payments if they earn less than certain thresholds. 

Self-employed people in the UK must consider NI in a different light to employees. People in regular employment will have their National Insurance contributions (NIC) calculated and paid out of their salaries, with employers also contributing separately for each employee. Employees pay NI under the ‘Class 1’ bracket.  

Most self-employed people now only pay Class 4 National Insurance, which is based on the profits from their business. These are charged as a percentage of your taxable profits and are paid alongside your Income Tax when you submit your Self Assessment tax return.

Class 2 National Insurance is no longer mandatory. If your profits are £7,105 or more (for 2026/27, £6,845 for 2025/26), you’ll automatically receive National Insurance credits towards benefits such as the State Pension. If your profits are below the above figures you can choose to pay voluntary Class 2 contributions to maintain your National Insurance record. You can learn more about Class 2 NICs in our “Self-employed National Insurance Guide”.

What is Class 4 NIC?

Class 4’s only apply to people who earn more than a certain threshold. They are charged as a percentage of profits. Because Class 4 doesn’t always apply, they can be a confusing topic that often causes issues for the newly self-employed. 

Fortunately, we’ve made it easy to understand Class 4 NICs and how they work. Read on to see who they apply to, how they are calculated and how you must pay them. 

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Class 4 NIC eligibility and profits threshold 2025/26 and 2026/27

If your profits exceed £12,570, you’ll be eligible to pay Class 4 contributions. Class 4 contribution amounts will be worked out during self-assessment and are charged at a percentage of profit within two brackets. You can calculate your contributions using our National Insurance calculator.

• 6% on profits between £12,570 and £50,270
• 2% on profits over £50,270

That means, somewhat confusingly, that you might be subject to both percentages if your profits exceed £50,270. We’ve created some fictional examples below to help make sense of how this works. 

Example 1: self-employed person reporting £40,000 of taxable profit

If you’re a self-employed person and you earn £40,000 of taxable profit, you’ll only need to make Class 4 NIC for income over the initial £12,570 threshold, which means you’d have £27,430 eligible for Class 4. 

• First £12,570: zero
• Next £27,430 (6%): £1,645.80
• Total Class 4 payment: £1,645.80

Example 2: self-employed person reporting £60,000 of taxable profit

If you earn more than the £50,270 limit, only those profits which exceed the limit will be subject to the lower 2% percentage. Take a self-employed person reporting £60,000 in a year, for example. They would pay Class 2 NICs at the flat rate, then Class 4 contributions would be as follows:

• First £12,570: zero
• Next £37,700 (6%): £2,262
• Next £9,730 (2%): £194.60
• Total Class 4 payment: £2,456.60

Example 3: self-employed person reporting £100,000 of taxable profit

If you were to generate £100,000 of taxable profit, you’d still repay exactly the same amount from the 6% bracket as other self-employed people. Only the profits exceeding the £50,270 threshold would incur the added 2% charge. 

• First £12,570: zero
• Next £37,700 (6%): £2,262
• Next £49,730 (2%): £994.60
• Total Class 4 payment: £3,256.60

As you may have gleaned from the examples above, the maximum you would ever have to repay from the 6% bracket for the 25/26 and 26/27 tax year is £2,262.

National Insurance (NI) is a mandatory tax levied on UK workers which contributes towards a range of benefits, including state pensions, the NHS, maternity pay and even unemployment benefits. Though NI is mandatory, some workers won’t have to make payments if they earn less than certain thresholds. 

Self-employed people in the UK must consider NI in a different light to employees. People in regular employment will have their National Insurance contributions (NIC) calculated and paid out of their salaries, with employers also contributing separately for each employee. Employees pay NI under the ‘Class 1’ bracket.  

If you’re self-employed, however, you’ll need to calculate and pay NI as part of your self-assessment. You’ll also need to understand the different classes of NIC and how they impact you. You’ll need to pay Class 4 contributions through Self Assessment, which must be completed by the 31st of January each tax year.

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Are there any exemptions from Class 4 NIC?

Most self-employed people with profits above the £12,570 threshold will need to pay Class 4 National Insurance. However, some people are exempt, including:

• People who were under 16 at the start of the tax year.
• People who were over State Pension age at the start of the tax year.
• Trustees, executors, and administrators receiving profits in that capacity rather than from their own self-employment activities.

Please note that if you reach State Pension age during the tax year, you’ll likely still need to pay Class 4 NICs for the whole tax year.

Calculate Class 4 NIC

Whilst this might all sound confusing, don’t worry - the fixed brackets make it easy to calculate Class 4 NICs. Rather than wasting time looking for a Class 4 National Insurance calculator, simply follow our directions below. 

Work out your taxable profit for the year to determine your Class 4 bracket and which actions you need to take. 

• Example 1: self-employed designer reports £35,000 taxable profit
• Example 2: self-employed joiner reports £70,000 taxable profit

Profits less than £12,570:

No Class 4 NICs needed

Profits between £12,570 - £50,270:

Subtract £12,570 from your total taxable profits. The leftover figure will be subject to the 6% NIC. You can calculate the amount you’ll need to pay by multiplying your figure by 0.06. 

Example 1: Designer takes £35,000 taxable profit and subtracts £12,570, leaving £22,430 eligible for the 6% rate. Multiply 0.06 by 22,430 results in a Class 4 NIC payment of £1,345.80.

Profits exceeding £50,270: ‍

If you exceed this bracket, you’ll always pay the 6% charge on the difference between £12,570 and £50,270, which is £37,700. 0.06 x 37,700 is £2,262. 

You’ll also need to pay 2% on any profits over the £50,270 limit, so subtract £50,270 from total profit to be left with the amount subject to the 2%. Multiple that by 0.02 to get the amount you’ll be charged. Finally, add them together for a total amount for Class 4 NICs. 

We know this may sound a little confusing, but it’s a simple calculation once you know your total taxable profits. If you don’t want to work it out yourself and want someone to make your tax reporting and payment processes easier, choose Crunch, and our chartered accountants will do your Self Assessment for you, calculating your income tax and NICs at the same time.