Self-employed National Insurance: Class 2 and Class 4

Self-employed National Insurance is easy to mix up with Income Tax, because both can appear on the same Self Assessment bill. They are separate charges, with their own official tables. This guide uses the National Insurance contributions rates page, updated on 6 April 2026 — which includes a past-year column for 2025/26 — and the current self-employed National Insurance rates page, which describes the 2026/27 position. The 2025/26 Class 2 figures are not assumed to equal 2026/27; they are read from that past-year table.

Class 2: treated as paid, or paid voluntarily

Class 2 is the weekly contribution that protects a self-employed National Insurance record once profits reach the Small Profits Threshold. The official table lists that threshold as £6,845 for 2025/26 and £7,105 for 2026/27. The weekly rate is £3.50 in 2025/26 and £3.65 in 2026/27. There are also special weekly rates for share fishermen and volunteer development workers, which most sole traders will never meet; they are in the same official table if you need them.

The self-employed rates page, which currently describes 2026/27, says that if your profits are £7,105 or more a year, Class 2 contributions are treated as having been paid to protect your record. That means you do not have to pay Class 2 contributions. If your profits are less than the threshold, you do not have to pay anything, but you can pay voluntary Class 2 to protect your record. Annex A states the same idea in table form: below the Small Profits Threshold the 2026/27 rate is £3.65 a week (voluntary); above the threshold it is £0.

Our tax calculator therefore does not add a Class 2 charge to the total when profits are at or above the threshold for the year you selected. Below the threshold it explains the voluntary option and still does not add a weekly amount, because paying voluntarily is a choice you make with HMRC, not an automatic assessment line in the same way as Class 4.

Class 4: 6% then 2%, on profits

Class 4 is charged on self-employment profits above a Lower Profits Limit. The official table gives the same limits and the same rates for 2025/26 and 2026/27: a Lower Profits Limit of £12,570, an Upper Profits Limit of £50,270, 6% between those limits, and 2% above the upper limit. The current self-employed rates page describes the 2026/27 charge in the same words: 6% on profits over £12,570 up to £50,270, and 2% on profits over £50,270. You must pay Class 4 if your profits are more than £12,570 a year.

Those percentages were not always 6%. The same official table shows 9% in 2023/24 between the two limits, and 6% from 2024/25 onwards. For the two years this site models, 6% and 2% are the published rates. Class 4 is calculated on profits — self-employed income minus allowable expenses — not on turnover, and not on employment pay, property income, pensions, dividends or savings. A person with a salary and a small self-employed profit pays Class 4 only on that profit, and only on the slice above £12,570.

A short example, using official limits and labelled as an example, helps to see the shape. Suppose self-employment profit is £30,000 and there is no other income of this type. Class 4 is 6% of £17,430 (£30,000 minus £12,570), which is £1,045.80. Income Tax is a separate calculation on the same profit after the Personal Allowance. If profit is £60,000, Class 4 is 6% of the £37,700 between the two limits (£2,262) plus 2% of the £9,730 above £50,270 (£194.60), which is £2,456.60. Change the numbers and the same structure applies.

How this meets Income Tax on a return

On a Self Assessment bill, Income Tax and Class 4 are added together for many practical purposes, including payments on account. The official payments-on-account page says those instalments are payments towards your next tax bill, including Class 4 National Insurance if you are self-employed. Capital Gains Tax and student loan repayments are not part of those instalments. When you plan a January payment, it is worth knowing which part of the bill is Class 4, because it follows profit, not the Income Tax bands, and it does not use the Personal Allowance.

Class 1 National Insurance, which employees and employers pay through payroll, is a different set of rates and thresholds and is not what this guide is about. Directors, landlors with particular facts, examiners and some other groups can have special rules; the self-employed rates page flags several of those groups and tells you to follow the special rules that apply.

Keeping a record, and filing

Even when Class 2 is treated as paid, it still matters that your profits and your registration are reported correctly, because the treatment depends on the profit figure on the return. File online for free on GOV.UK. If profits are low and you want to protect a qualifying year for the State Pension, look at the official voluntary Class 2 wording rather than at a calculator total. If a later official table changes a threshold, the official page wins over this guide.

The 2025/26 Small Profits Threshold of £6,845 and weekly rate of £3.50 are the figures that belong on a return you are filing by 31 January 2027. The 2026/27 figures of £7,105 and £3.65 belong to the year that started on 6 April 2026. Mixing the two years is a common source of a wrong estimate, which is why we keep them in separate columns in the engine and in this guide.

Expenses, the trading year, and what “profits” means

The official self-employed National Insurance page says you work out your profits by deducting your expenses from your self-employed income. Class 4, and the Small Profits Threshold test for Class 2, both depend on that profit figure, not on how much cash arrived in a particular month. A year with uneven invoices can still sit above or below a threshold once expenses are taken off. Allowable expenses are a matter of official self-employment guidance; inflating them, or omitting them, will distort both Income Tax and Class 4.

Most people who have been self-employed for a while now use the tax-year basis, so the profits that go on the 2025/26 return are the profits of 6 April 2025 to 5 April 2026. If you are still unwinding an older accounting date, follow the official basis-period guidance rather than this general guide. Mixing an old accounting year with a new National Insurance table is another way to apply the wrong threshold.

When profits sit only a little above £12,570, Class 4 is small but not zero: 6% of the excess. When they sit between the Small Profits Threshold and the Lower Profits Limit, Class 4 is zero and Class 2 is treated as paid, so the National Insurance line on a planning estimate can look empty even though your record is being protected. That pattern is a feature of the official tables, not a sign that the calculator has skipped a charge it should have added.