National Insurance for Sole Traders Explained
Self-employed workers pay a different type of National Insurance compared to employees. Following recent changes that abolished mandatory Class 2 contributions, here is exactly what you will pay in 2026/27.
Class 4 National Insurance Rates
Class 4 National Insurance is calculated based on your net business profits at the end of the tax year:
- 6% on profits between £12,570 and £50,270.
- 2% on any profits above £50,270.
What happened to Class 2?
Class 2 National Insurance used to be a weekly flat fee. It has now been completely abolished for mandatory payments. If your annual profits are above the Small Profits Threshold (which is £6,725), HMRC automatically credits your National Insurance record with a qualifying year for your state pension without you paying a penny. If your profits are below £6,725, you can choose to make voluntary contributions to protect your pension rights.
How do I pay my National Insurance?
Your National Insurance is calculated automatically when you file your Self Assessment tax return. You pay it alongside your Income Tax bill, so there is no need to make separate payments during the year.
Estimate your combined tax and National Insurance obligations using our Self-Employed Tax Calculator.