National Insurance is a tax on earnings and self-employed profits. There are different types of National Insurance, you'll need to understand the differences.
National Insurance is a tax on earnings and self-employed profits. You normally start paying when you turn 16 and earn over a certain amount.
Your National Insurance contributions (NICs) go towards whether you qualify for certain benefits, most notably the state pension.
When you're employed, contributions are normally calculated and taxed at source by your employer via the PAYE (Pay as you earn) scheme, but when you're self-employed, you'll need to be paying National Insurance yourself.
There are a number of different types of National Insurance contributions, depending on your circumstances.
If you're self-employed, you'll pay Class 4 National Insurance on your profits.
If your profits are £6,845 or more a year Class 2 contributions are treated as having been paid to protect your National Insurance record. This means you do not have to pay Class 2 contributions.
If your profits are more than £12,570 a year, you must pay Class 4 contributions.
For tax year 2025 to 2026 you’ll pay:
Self-employed people used to pay Class 2, which contributed towards your state pension, but were abolished in April 2024.
If you have profits of less than £6,725, you do not have to pay anything but you can choose to pay voluntary Class 2 contributions, which can help maintain your state pension record.
The Class 2 rate for tax year 2025 to 2026 is £3.50 a week.
If you're a company director of a limited company, you're not technically self-employed, but an employee of your own company. You'll pay Class 1 National Insurance as an employee, and your company will pay Employers' National Insurance contributions on top - currently at 15% since April 2025.
If you're working both as self-employed and as an employee of others (i.e. via umbrella companies or inside IR35 contracts), you'll need to calculate your various deductions to make the correct payments.
Your National Insurance contributions are calculated based on your (Self Assessment)[/glossary/self-assessment] tax return - and are paid at the same time as your Income Tax payments.
Tax can be complex, so we generally recommend finding an accountant to help you - but you should still aim to understand what tax you are paying, how much you should be putting aside, and make sure you pay your tax on time.
Many freelancers start self-employment without being aware of what they need to put aside for tax and national insurance. Don't make that mistake. Read the guides linked below or speak to an accountant for support.
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