National Insurance when self-employed — how it works now

Updated: 14/07/2026 · 6 min read

Self-employed National Insurance is collected through Self Assessment — the calculation simply adds it to your tax bill. The main charge is Class 4, a percentage of profits above a threshold. Class 2, the old weekly flat charge, was effectively abolished from April 2024: with profits above a small threshold your year counts towards the State Pension automatically, at no cost.

Class 4 — the main charge

Class 4 is calculated on annual PROFIT (income minus expenses): a main rate on profits above the lower threshold (aligned with the personal allowance) and a lower rate above the upper threshold. Rates move with Budgets — check gov.uk for current figures. Every documented expense receipt reduces Class 4 as well as income tax.

Class 2 — what changed

Since April 2024, self-employed people with profits above the small profits threshold no longer pay Class 2 — but the year still counts towards the State Pension as if they had (a National Insurance credit). With very low profits you can pay Class 2 voluntarily to protect the year.

Why qualifying years matter

A full State Pension needs 35 qualifying years
You need at least 10 years to get anything
Gaps can be filled later (Class 3 voluntary) but that costs more than keeping years alive as you go
Check your record in your HMRC Personal Tax Account (State Pension forecast)

Employed and self-employed at once

If you also have a job, Class 1 is deducted through PAYE and Class 4 applies to business profits. Annual maximum rules stop you overpaying across classes — Self Assessment usually handles this automatically, but double-check with an accountant at higher combined incomes.

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Frequently asked questions

Do I still pay Class 2?+

Not if your profits are above the small profits threshold — the year is credited for State Pension purposes anyway. Below it, consider voluntary Class 2 to protect the year.

How much is Class 4?+

A percentage of profits above the lower threshold, with a reduced rate above the upper threshold. Rates change at Budgets — see gov.uk for the current figures.

How do I check my NI record?+

In your HMRC Personal Tax Account under National Insurance / State Pension forecast — it shows full and partial years and what topping up would cost.

I have a job and a side business — am I paying NI twice?+

You pay Class 1 on the job and Class 4 on business profits, but annual maximum rules cap the combined total. The Self Assessment calculation normally applies them for you.

This guide is general information, not tax advice. Rules and figures change — check gov.uk (HMRC) for current rates, and speak to an accountant about your situation.