As an employee in 2026/27 you pay National Insurance at 8% on earnings between £12,570 and £50,270 a year, then 2% on anything above £50,270. Below £12,570 you pay nothing. So on a £35,000 salary you pay NI on £22,430 of it, which is £1,794 a year, about £150 a month.
National Insurance is the second tax on your pay. It sits alongside income tax, gets deducted every month, and most people don't really know what it pays for. Here's the straightforward version.
NI is technically a contribution, not a tax. It funds specific things: the State Pension, Jobseeker's Allowance, Employment and Support Allowance, Maternity Allowance, and bereavement benefits. It doesn't go into the general tax pot (at least in theory). Your NI record determines whether you qualify for these benefits later in life.
You get a National Insurance number when you turn 16. It's your lifelong identifier for tracking contributions.
If you're employed, you pay Class 1 NI. The rates are:
The £12,570 threshold is called the Primary Threshold. Below it, you don't pay NI (though you still build up credits if you earn above £6,396, the Lower Earnings Limit). The £50,270 ceiling is the Upper Earnings Limit (UEL).
So on a £35,000 salary, you'd pay NI on £22,430 (that's £35,000 minus £12,570). At 8%, that's £1,794.40 per year, or about £149.53 per month.
Here's something that doesn't appear on your payslip. Your employer pays 15% on your earnings above £5,000 (the Secondary Threshold). On that same £35,000 salary, your employer pays £4,500 in NI on top of your salary. You never see this money, but it's a real cost of employing you.
From April 2025, the employer rate went up from 13.8% to 15%, and the threshold dropped from £9,100 to £5,000. That was a significant hit to businesses.
The main thing your NI record determines is your State Pension. You need 35 qualifying years of contributions to get the full new State Pension, which is £230.25 per week (£11,973 per year) in 2026/27. With 10 qualifying years you get the minimum; below 10 you get nothing.
A qualifying year means you either earned above the Lower Earnings Limit (£6,396) for the year, or received NI credits (which you get automatically if you're on Universal Credit, caring for a child under 12, or getting certain benefits).
You can check your NI record on the HMRC app or at gov.uk/check-national-insurance-record. It shows how many qualifying years you have and how many gaps exist.
There are several classes of NI, and which one you pay depends on your employment status:
Class 1: Employees. Deducted automatically through PAYE. This is what most people pay.
Class 2: Self-employed. A flat rate of £3.45 per week if your profits exceed £12,570. From April 2024, most self-employed people no longer need to pay Class 2 separately; they get NI credits automatically instead.
Class 4: Also self-employed. Paid through your self-assessment return. The rates are 6% on profits between £12,570 and £50,270, then 2% above that. This is in addition to Class 2.
Class 3: Voluntary contributions. You pay these to fill gaps in your record. The rate is £17.45 per week. People sometimes pay these to boost their State Pension entitlement if they have years with no contributions.
Once you reach State Pension age (currently 66, rising to 67 between 2026 and 2028), you stop paying employee NI. Completely. Even if you carry on working.
Your employer still pays their share on your wages. But your payslip will show zero NI deduction from your side. You need to give your employer a certificate of age exemption (form CA4140, or they can check your date of birth against pension age). If they keep deducting NI after you've passed pension age, you can claim it back from HMRC.
This is why people who work past pension age see a nice bump in take-home pay. On a £30,000 salary, stopping NI saves you about £1,394 per year.
People sometimes confuse NI and income tax because both come off your pay. But they work differently:
On a monthly payslip, you'll see NI as a separate line from income tax. For a £30,000 salary, expect to see roughly £116 per month in NI deductions. Your employer's NI contribution (about £312 per month at that salary) won't appear on your payslip at all.
If your pay varies month to month (overtime, bonuses), your NI will vary too. Unlike income tax, NI doesn't get smoothed out over the year. Each pay period is calculated independently. That's why a big bonus month can feel like it was taxed harder than usual; you've temporarily jumped above the UEL for that period.
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