Originally posted on: 14 April 2025
Updated on: 9 February 2026
A lot of our newly self-employed clients feel a sense of excitement mixed with just a hint of anxiety, especially when it came to taxes and National Insurance. If you’re newly self-employed in the UK, you might be feeling something similar. Perhaps you’ve just left full-time employment to launch your own consultancy, start freelancing, or set up a small business from home. Whatever your situation, one of the questions you’re likely asking yourself is: do self-employed pay National Insurance?
The short answer is yes. Understanding your obligations around self-employed National Insurance isn’t just another admin box to tick—it’s really important for ensuring you’re properly covered for things like your state pension and certain other benefits. Plus, knowing exactly what NI do self-employed pay will save you a headache or two down the road, especially when it comes to filling in your Self Assessment tax return each year.
With the 2025/26 tax year just starting up, it’s now a good idea to get up to speed. In this blog, we’ll clearly explain what the latest NIC changes are, what they mean for you, and how you can make sure you’re not paying a penny more (or less) than you need to.
Understanding National Insurance
National Insurance (NI) is one of those things that you’ve probably heard of countless times, yet might never have stopped long enough to truly understand. If you’re newly self-employed, getting your head around National Insurance and self-employed obligations is essential—not just to keep HMRC happy, but to safeguard your financial future too.
At its core, National Insurance is essentially your contribution towards certain state benefits, including the State Pension, maternity allowance, and other safety nets like Employment and Support Allowance. Unlike income tax, which goes into a broader pot funding government services like education, healthcare, roads, and the like, National Insurance has a more targeted purpose—it’s your personal stake in future benefits, particularly retirement provision.
While income tax is calculated purely based on the income you earn—no matter how it’s earned—self-employed National Insurance contributions follow their own specific set of rules. As a self-employed individual in the 2025/26 tax year, you’ll typically encounter two types of National Insurance contributions: Class 2 and Class 4. Class 2 contributions are no longer automatically payable if your profits exceed a certain threshold. Instead, if your annual profits are £6,845 or more, you’ll receive a National Insurance credit that counts towards benefits like the State Pension, even though no payment is required. If your profits fall below this threshold, you can still choose to make voluntary Class 2 contributions, which are set at £3.50 per week, to maintain your National Insurance record and protect your future entitlements.
Class 4 contributions, on the other hand, remain a mandatory part of your self-employed tax obligations. These are calculated as a percentage of your annual profits. For the 2025/26 tax year, you’ll pay 6% on profits between £12,570 and £50,270, and 2% on any profits above £50,270. These contributions are assessed and paid through your annual Self Assessment tax return.
But why does this matter to you as someone who’s newly stepped into self-employment? Simply put, staying on top of your self-employment National Insurance obligations ensures you’ll receive the full range of state benefits you’re entitled to when you eventually retire or need support. Ignoring NI isn’t just risky—it can also be costly if you fall behind or underpay.
So, while income tax feels like money disappearing into the vast public coffers, National Insurance contributions are about investing in your personal future.
National Insurance Obligations for the Self-Employed
One of the first things we are often asked by new freelancers, contractors, or sole traders is simply: “Do self-employed pay National Insurance?” The answer is straightforward—yes, you absolutely do. But understanding exactly how it works and what you’ll need to pay can feel a little confusing at first.
As a self-employed individual, your National Insurance obligations fall into two categories: Class 2 and Class 4 contributions. Together, these are commonly referred to as your self-employed NI contributions.
Class 2 NI is a relatively modest weekly payment designed to build your entitlement to key state benefits, notably the State Pension. It’s particularly important for those with smaller profits who may not automatically pay other types of NI. For the 2025/26 tax year, if your annual profits exceed the Small Profits Threshold (£6,845), you’ll receive National Insurance credits automatically, without the need to pay Class 2 NI. However, if your profits are below this threshold, you might choose to voluntarily pay Class 2 contributions anyway, ensuring you continue to build towards your State Pension. As a result, most of our clients pay no Class 2 NIC.
Class 4 NI contributions are essentially profit-based charges and can feel a bit more like an additional layer of self-employed tax. This contribution is calculated as a percentage of your profits above a certain level. For the 2025/26 tax year, Class 4 contributions are payable at a rate of 6% on annual profits between £12,570 and £50,270, and then at 2% on profits above £50,270.
These contributions aren’t optional, and missing them can have serious implications, such as penalties imposed by HMRC. However, it’s important to note that Class 4 contributions do not count towards your National Insurance record and therefore do not affect your entitlement to state benefits. To maintain your contribution history and ensure eligibility for benefits like the State Pension, you should focus on making Class 2 contributions.
Ultimately, staying on top of your self-employed NI contributions helps you avoid nasty surprises from HMRC and ensures you receive the benefits you’re entitled to—making them an essential part of your financial planning as a self-employed individual.
National Insurance Rates for 2025/26
One of the most common questions we get from clients who are newly self-employed is: “How much is National Insurance for self-employed people?” Given that the rules have changed in recent years, let’s walk through exactly what the latest self-employed National Insurance rates look like, so you know exactly where you stand.
Class 2 National Insurance Contributions (NICs):
From 06 April 2024, the government has introduced some major changes to Class 2 NICs, simplifying the system considerably:
- Mandatory Class 2 contributions have been abolished. If your profits are above the Small Profits Threshold (£6,845), you’ll automatically receive NI credits without having to make any payment. Essentially, the government is recognising your contribution to society simply through the act of working as a self-employed individual.
- However, if your profits fall below this threshold (£6,845), you won’t automatically receive these credits. In this situation, you can still choose to make voluntary Class 2 contributions, currently set at £3.50 per week, to ensure your NI record remains complete. Doing so is often a wise move, particularly if you’re planning on claiming the full State Pension in future.
Class 4 National Insurance Contributions (NICs):
Class 4 contributions continue to operate on a sliding scale based on your self-employed profits:
- You’ll pay 6% on annual profits between £12,570 and £50,270.
- For profits above £50,270, the NI rate for self-employed individuals drops significantly to just 2%.
So, if you’re making £45,000 a year in profits, for instance, your Class 4 NICs would be calculated at 6% on the amount above £12,570. But if your profits exceed the £50,270 mark, every pound you earn beyond that threshold will attract the lower rate of 2%.
Being aware of these thresholds and rates helps you anticipate exactly how much you’ll need to set aside, preventing any unpleasant surprises when it’s time to complete your Self Assessment tax return.
Payment Schedule for National Insurance
Now that we’ve covered how much you’ll pay, the next important question is usually: “When do self-employed pay National Insurance?” If you’re new to self-employment, understanding how this works is super useful, so let’s clarify exactly how the process works.
All National Insurance contributions for the self-employed are calculated and collected through your annual Self Assessment tax return. This means that when you’re filling in your tax return online, the amount of National Insurance you owe for the tax year is automatically worked out for you.
Here are the key dates to remember:
- The tax year ends on 5 April each year. This means your profits and earnings calculations are always based on income generated from 6 April in one year to 5 April the following year.
- The Self Assessment deadline for filing your return and paying any tax and NI owed is 31 January following the end of that tax year. For example, your NI for the tax year ending 5 April 2026 will be due by 31 January 2027.
In addition to this, the UK’s tax system uses something called a Payment on Account system. This means you’ll usually need to make two advance payments towards your next year’s tax bill. These payments are due on:
- 31 January (same time you pay your main tax bill), and
- 31 July following
These advance payments are based on your previous year’s tax and Class 4 NI liability, effectively spreading your payments throughout the year rather than hitting you all at once. It’s a system that can initially seem complicated, but the idea is simple enough: it helps you manage your cash flow better by breaking your tax and NI payments into more manageable chunks.
So, when answering the common query “does Self Assessment include National Insurance?”, the short answer is yes—it certainly does. Self Assessment is your one-stop-shop for both income tax and NI, simplifying your administration and helping ensure you remain compliant with HMRC without unnecessary hassle.
“…the service has been fabulous.”
Ah Mike, we think you’re pretty fabulous too!
How to Pay National Insurance
Once you’ve established how much you owe, the next question naturally follows: “How do I pay National Insurance through Self Assessment?” The good news is, HMRC has streamlined the process for the self-employed—your tax and National Insurance (NI) are handled together, making life simpler.
It’s straightforward: you’ll pay through your annual Self Assessment tax return. Each year, you will submit details of your income, expenses, via a self-assessment tax return to HMRC. The tax return software then calculates the amount of tax and NI you owe automatically.
Here’s the basic breakdown of the process:
- Complete and file your Self Assessment online (by 31 January following the end of the tax year).
- Your Class 4 NI contributions are calculated automatically based on your annual profits.
- Any NI owed is combined with your income tax liability into a single figure, payable by the 31 January deadline.
For those whose profits are below the Small Profits Threshold (£6,845 in 2025/26), you won’t automatically pay Class 2 NI. However, if you want to maintain your entitlement to certain state benefits, including the State Pension, you can choose to pay voluntary Class 2 contributions. You can set this up directly through HMRC online services, by contacting them via their helpline, or through your Self Assessment return itself, by ticking the box to opt-in voluntarily.
Being proactive here is wise—missing out on years of NI contributions can significantly affect your future entitlements, particularly the State Pension.
Real-Life Scenarios
Let’s make things a bit clearer by looking at some realistic scenarios, illustrating how much NI self-employed individuals pay, depending on different profit levels.
Scenario 1: Profits below £6,845
Imagine Sarah, who recently started her freelance graphic design business, making a modest profit of £5,000 in the tax year. She’s below the self-employed threshold for automatic NI credits. Although Sarah doesn’t have to pay Class 2 NICs, she wisely opts to pay voluntary contributions (£3.50 per week) to protect her pension entitlement.
Scenario 2: Profits between £6,845 and £12,570
Now, let’s consider John, a self-employed fitness instructor, with annual profits of £10,000. Because his profits are above the Small Profits Threshold (£6,845), he does not need to pay Class 2 National Insurance. However, under the rules, his contributions are automatically treated as paid.
Scenario 3: Profits between £12,570 and £50,270
Next, we have Emily, a freelance marketing consultant, who earns profits of £35,000 in a year. Emily’s profits exceed the lower NI limit (£12,570), making her liable for Class 4 NICs at a rate of 6% on the portion of her profits above this threshold. This means Emily pays Class 4 contributions on the £22,430 difference (profits between £12,570 and her total profits of £35,000).
Scenario 4: Profits above £50,270
Lastly, meet Tom, an IT consultant with annual profits of £60,000. Tom pays Class 4 NI contributions at two different rates—6% on profits between £12,570 and £50,270, and a reduced rate of 2% on his profits above £50,270 (in this case, on the £9,730 above that limit).
These scenarios clearly demonstrate how much National Insurance contributions self-employed individuals pay at different income levels. Knowing exactly where you stand makes planning your finances significantly easier.
National Insurance and Self Assessment
For those new to running their own business, Self Assessment can initially seem complicated. A frequent question I hear is, “Does Self Assessment include National Insurance?” Happily, it does—your Self Assessment tax return neatly integrates your NI contributions alongside your tax liability.
When you complete your Self Assessment and National Insurance reporting each year, the HMRC online system automatically calculates your NI obligations based on the profits you declare. Both Class 2 (if you’ve opted to pay voluntarily or if applicable) and Class 4 NICs (based on profit levels) are included, meaning you don’t have to perform any separate calculations yourself.
Accurate record-keeping throughout the year is key. Maintaining detailed and organised records of income and allowable expenses not only helps ensure your tax return is correct—it also means you pay exactly the right amount of NI contributions. Remember, errors or late filings can lead to penalties, interest charges, and unnecessary stress.
As a quick recap, here are the key dates for your diary:
- Tax year runs from 6 April to 5 April annually.
- Online Self Assessment tax return filing and payment deadline is 31 January following the end of the tax year.
- Payment on Account instalments (if applicable) are due by 31 January and 31 July each year.
Keeping these deadlines front of mind, and proactively planning your payments, can make the entire self-assessment national insurance process straightforward and stress-free—exactly as we like it here at No Worries Accounting!