How do National Insurance contributions (NICs) work?

If you’re wondering “How much is national insurance?”, you’re in the right place. Understanding how National Insurance (NI) contributions work is essential for anyone earning an income in the UK – whether you’re employed, self-employed, or paying voluntarily. On this page, we’ll break down what NI is, what it’s used for, and how much individuals might pay in the 2025/26 tax year.

The information provided here is for informational and educational purposes only and does not constitute financial advice. Please consult with a licensed financial adviser or professional before making any financial decisions. Your financial situation is unique, and the information provided may not be suitable for your specific circumstances. We are not liable for any financial decisions or actions you take based on this information.

National Insurance (NI) is a system of contributions paid by workers and employers to fund various state benefits. These include the State Pension, Jobseeker’s Allowance, Maternity Allowance, and other welfare programs.

Your NI contributions (abbreviated to NICs) count towards your entitlement to these benefits, especially the State Pension. To receive the full pension, you’ll need a set number of ‘qualifying years’. If you don’t make enough pension contributions throughout your lifetime, you might not qualify for a State Pension.

A qualifying year is a tax year in which you’ve made enough National Insurance contributions (or received enough National Insurance credits) to count towards your State Pension record and the other contributory benefits.

For employees in the 2025/26 tax year, this generally means you’ve earned at least the Lower Earnings Limit (LEL) of £125 per week. You don’t always need to pay NI to qualify; if your earnings are above the LEL but below the primary threshold for paying NI (£242 per week), your record is still protected because your contributions are treated as paid. Once you earn above the primary threshold, you’ll start paying NI in the usual way.

If you’re over 16 and earn above a certain amount, you’ll usually need to pay National Insurance. The exact amount you’ll pay depends on how much you earn, and whether you’re employed or self-employed.

You’ll usually stop paying National Insurance when you reach State Pension age, but this can vary slightly depending on your circumstances.

The amount you pay in the UK depends on how much you earn and whether you’re employed or self-employed. Employees usually have contributions automatically deducted from their wages through PAYE. If you’re self-employed, you’ll pay contributions based on how much profit you make ( i.e. your income after subtracting any expenses).

• If you’re employed, you’ll pay 8% in National Insurance contributions on earnings between £1,048 and £4,189 a month (before tax), and a further 2% on earnings above that.
• If you’re self-employed, you’ll generally pay Class 4 National Insurance at 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270.

To check your current National Insurance record or to see how many qualifying years you’ve built up, you’ll need your National Insurance number (find it on your payslip, P60, or through your personal tax account) and to log in to your personal account on the HMRC website.

Here’s an overview of the National Insurance contribution rates for the 2025/26 tax year, and the percentage of your earnings you’ll pay depending on your occupation and employment status.

The minimum National Insurance contribution per year depends on your employment and income level.

There’s no fixed minimum amount if you’re employed, as you’ll only pay NI if your earnings are above the primary threshold of £1,048 per month, or £12,570 per year. You won’t pay National Insurance if you earn below this amount, but you may still receive NI credits that count towards your State Pension.

If you’re self-employed, National Insurance contributions are voluntary if your profits are below £6,845 per year.  If you choose to pay and want to fill a full year, the cost is £3.50 a week, or £182 a year. You need at least 10 qualifying years to qualify for the State Pension, which self-employed people can achieve through a combination of Class 2 contributions or credits.

There’s no minimum contribution if you’re making voluntary contributions to fill gaps in your NI record, but you would need to pay £17.75 a week, or approximately £923 per year, to qualify for the full State Pension and other benefits.

If you’re self-employed in the UK, you might be liable for two types of National Insurance contributions based on your earnings: Class 2 and Class 4.

Class 2 is a flat weekly amount that counts towards your entitlement to benefits like the State Pension, while Class 4 is a percentage of your taxable profits that you pay as a tax – but it doesn’t itself provide qualifying years towards your pension. Instead, qualifying years are awarded automatically based on your profit level.

In short, as long as you earn over £6,845, you’ll automatically get a qualifying year toward your State Pension. Here’s how the National Insurance brackets work.

National Insurance helps fund several benefits and services in the UK. When you make NI contributions (whether that’s through employment, self-employment, or voluntary payments), you build up entitlement to these benefits.

• State Pension: A regular payment people can claim once they reach State Pension age, based on their NI contribution history. You’ll need a minimum of 10 qualifying years to receive anything, and 35 qualifying years to receive the full new State Pension.
• Maternity allowance: Support for self-employed or low-earning mothers who don’t qualify for Statutory Maternity Pay. This allowance is based on Class 2 NI contributions.
• Jobseeker’s Allowance (JSA): Financial support for people who are unemployed and actively looking for work. JSA is available to claim if you’re over 18 but under the State Pension age, and you’ve made enough Class 1 NI contributions in the last two to three years. Unlike Universal Credit, JSA isn’t means-tested.
• Employment and Support Allowance: Financial support for people who are ill or have a disability that affects their ability to work. It requires sufficient NI contributions, based on Class 1 (employed) or Class 2 (self-employed).
• Bereavement Support Payment: Financial support for people after the death of their spouse or civil partner, to help with the financial impact of bereavement. To qualify for the payment, your spouse or civil partner must have made National Insurance contributions for at least 25 weeks during their working life, alongside other conditions.

In short, National Insurance is a crucial component of the UK’s social safety net, providing financial support when people need it most.

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