National Insurance explained: rates, thresholds and what it buys
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Quick answer: National Insurance is a tax on earnings that builds your entitlement to the State Pension and some benefits. Employees pay 8% on weekly earnings between 242 and 967 pounds, then 2% above. The self-employed pay 6% Class 4 on profits between 12,570 and 50,270 pounds, then 2%.
National Insurance (NI) sits alongside Income Tax but works differently: it only applies to earnings from work, and paying it builds your record towards the State Pension and certain benefits. This guide explains the rates for 2026/27, what NI actually buys you, and how to check and fill gaps in your record.
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Content updated: 3 min read
Primary source: www.gov.uk/national-insurance-rates-letters
How much National Insurance you pay
Employees pay Class 1 NI at 8% on weekly earnings between 242 and 967 pounds, and 2% on anything above 967. It is taken automatically through PAYE, so it comes straight off your payslip.
Worked example: on a 30,000 pound salary you pay 8% on earnings above the 12,570 pound annual threshold, roughly 1,394 pounds of NI for the year. The self-employed pay Class 4 NI at 6% on profits between 12,570 and 50,270, then 2% above, through Self Assessment.
What National Insurance buys you
You normally need at least 10 qualifying National Insurance years for any new State Pension. The 35-year rule for the full amount applies if your NI record started after April 2016; earlier records use transitional rules, including any contracted-out history. Check your personal forecast.
NI also underpins contribution-based benefits such as some forms of Jobseeker's Allowance and Maternity Allowance. Income Tax, by contrast, funds general government spending and buys no specific entitlement.
Gaps and voluntary contributions
Time spent not working, on low pay or abroad can leave gaps in your record. You can check your NI record and State Pension forecast for free on GOV.UK.
If you have gaps, voluntary Class 3 contributions can sometimes fill them and boost your State Pension, but it is not always worth it, so check the figures before paying.
Common questions
How much National Insurance do I pay?
Employees pay 8% on weekly earnings between 242 and 967 pounds and 2% above. On a 30,000 pound salary that is roughly 1,394 pounds a year.
Does paying NI guarantee a full State Pension?
You normally need at least 10 qualifying National Insurance years for any new State Pension. The 35-year rule for the full amount applies if your NI record started after April 2016; earlier records use transitional rules, including any contracted-out history. Check your personal forecast.
Can I fill gaps in my NI record?
Often yes, through voluntary Class 3 contributions, but it is not always cost-effective. Check your State Pension forecast first to see whether topping up would actually increase it.