Pay & tax
National Insurance Explained: What You Pay and Why
What National Insurance is, how much you pay in 2026/27, what your employer pays on top, and why it matters for your State Pension.
Updated June 2026 · 9 min read
General information only — not financial, legal or tax advice. Rates and rules change; check GOV.UK or official resources before making decisions.
Key takeaways
- National Insurance (NI) is a separate deduction from income tax that funds the State Pension and some benefits.
- In 2026/27, employees pay 8% NI on earnings between £12,570 and £50,270, then 2% on anything above £50,270.
- You pay no employee NI on the first £12,570 you earn, and the rate drops to 2% once you pass £50,270 a year.
- Your employer pays its own NI on top of your wages — 15% on earnings above the £5,000 secondary threshold.
- Paying NI builds 'qualifying years' towards your State Pension; you usually need 35 years for the full new State Pension.
How much National Insurance will I pay in 2026/27?
If you are an employee, you pay Class 1 National Insurance of 8% on the slice of your earnings between £12,570 and £50,270, and 2% on anything above £50,270. You pay nothing on the first £12,570.
So someone earning £35,000 pays 8% on £22,430 (£35,000 minus £12,570), which is about £1,794 a year. NI is taken from your pay automatically through PAYE, alongside income tax, before the money reaches your bank account.
What is National Insurance and why do you pay it?
National Insurance is a tax on earnings that is separate from income tax. It was introduced to fund a 'pot' of state support, and your contributions count towards your entitlement to certain benefits — most importantly the State Pension.
Unlike income tax, NI is only charged on money you earn from working (wages or self-employed profit). It is not charged on pensions, savings interest, dividends or rental income, and you stop paying it once you reach State Pension age.
Class 1 National Insurance: what employees pay
Most employees pay Class 1 NI. It works in bands, a bit like income tax: a 0% band up to the primary threshold, a main rate, and a lower rate on very high earnings.
The 2% rate above £50,270 surprises some people — it means a high earner pays a smaller percentage of NI on their top slice of pay than a middle earner does, even though the cash amount is larger.
| Earnings band | Annual earnings | Employee NI rate |
|---|---|---|
| Below the primary threshold | Up to £12,570 | 0% |
| Main rate band | £12,570 to £50,270 | 8% |
| Above the upper earnings limit | Over £50,270 | 2% |
What does your employer pay on top?
Employers pay their own National Insurance on your earnings — this is not deducted from your pay, but it is a real cost of employing you. For 2026/27, employer NI is 15% on your earnings above the £5,000 secondary threshold.
This is why salary sacrifice can be attractive: when you swap salary for a pension contribution, both you and your employer save NI on the sacrificed amount. It also explains why employer NI is often part of pay-rise and bonus discussions.
How National Insurance builds your State Pension
Paying NI (or being credited with it) builds up 'qualifying years'. To get any new State Pension you usually need at least 10 qualifying years, and you need around 35 qualifying years to get the full new State Pension.
You can build qualifying years even when you are not paying NI — for example through National Insurance credits while claiming Child Benefit for a child under 12, or while receiving certain benefits. This matters if you take time out of work.
When do you stop paying National Insurance?
You stop paying employee National Insurance once you reach State Pension age, even if you carry on working. Income tax can still apply after that age, but NI does not.
You also pay no NI in any week you earn below the threshold, which is why part-time and irregular work can mean some weeks attract NI and others do not.
National Insurance with more than one job
Each job applies the thresholds separately, so if you have two jobs that each pay under £12,570 you might pay little or no NI overall — unlike income tax, where your Personal Allowance is usually allocated to one job.
If you are both employed and self-employed, you can pay Class 1 NI as an employee and Class 4 NI on your self-employed profit in the same year. Our Self-Employed Tax Calculator covers the self-employed side.
How to check your National Insurance record
You can view your full NI record and your State Pension forecast for free through your Personal Tax Account on GOV.UK or the HMRC app. It shows which years are 'full', which have gaps, and whether you can fill gaps by paying voluntary contributions.
Checking is worthwhile if you have worked abroad, had career breaks, or were self-employed — gaps in your record can reduce your State Pension, and there are deadlines for filling older years.
Work out your National Insurance
Use our National Insurance Calculator UK to estimate the employee NI deducted from your salary each year, month and week, plus the NI your employer pays on top. For your full take-home pay including income tax, try the PAYE Salary Calculator. Estimates only — check GOV.UK and your payslip for official figures.
Frequently asked questions
- How much National Insurance do I pay on £30,000?
- In 2026/27 you pay 8% on earnings between £12,570 and £50,270. On a £30,000 salary that is 8% of £17,430, roughly £1,394 a year, or about £116 a month, taken automatically through PAYE.
- Is National Insurance the same as income tax?
- No. They are separate deductions with different thresholds. Income tax funds general government spending; National Insurance counts towards your State Pension and some benefits, and is only charged on earnings from work, not on pensions or savings.
- Do I pay National Insurance after State Pension age?
- No. You stop paying employee National Insurance once you reach State Pension age, even if you keep working. Income tax can still apply, but employee NI does not.
- Why does National Insurance drop to 2% on high earnings?
- Above the upper earnings limit of £50,270, employee NI falls from 8% to 2%. The main band funds most benefit entitlement, so the rate on earnings above the limit is lower even though the cash amount keeps rising.
Try the calculator
Put this into numbers with our free UK calculators.
Need free help? See our useful UK resources including MoneyHelper and StepChange.