National Insurance 2025/26: Rates, Thresholds & How It Works

What Is National Insurance?

National Insurance (NI) is a tax on your earnings that funds state benefits including the NHS, state pension, and unemployment benefits. Unlike income tax, NI has its own separate rates and thresholds. Most employees pay Class 1 NI, which is automatically deducted from your wages.

Employee NI Rates for 2025/26

For employed workers under 65:

Earnings Band	NI Rate
Up to £12,570 per year	0%
£12,571 to £50,270 per year	8%
Over £50,270 per year	2%

Employees aged 65 and over pay no National Insurance at all, regardless of income.

How NI Is Calculated: An Example

On a salary of £35,000:

First £12,570: £0 (below threshold)
£12,571 to £35,000 (= £22,430): £22,430 × 8% = £1,794.40
Total annual NI: £1,794.40 (£149.53 per month)

Employer NI Contributions

Your employer also pays NI on your behalf — this doesn't come out of your wages but is an additional cost to your employer:

Earnings Band	Employer NI Rate
Up to £5,000 per year	0%
Over £5,000 per year	15%

The employer threshold dropped from £9,100 to £5,000 and the rate increased from 13.8% to 15% from April 2025. This doesn't affect your take-home pay directly, but it increases the total cost of employing you.

NI Classes Explained

Class	Who Pays	Rate (2025/26)
Class 1	Employees (and employers)	8% employee / 15% employer
Class 2	Self-employed (profits above £6,725)	£3.45/week
Class 3	Voluntary (to fill gaps in NI record)	£17.45/week
Class 4	Self-employed (on profits)	6% on £12,570–£50,270, 2% above

NI and Your State Pension

You need 35 qualifying years of NI contributions to receive the full new state pension (currently £221.20/week for 2024/25). You need at least 10 qualifying years to get any state pension at all.

Check your NI record at gov.uk/check-national-insurance-record to see how many qualifying years you have and whether there are gaps you should fill.

Key Differences: NI vs Income Tax

NI stops at 65 — you pay no NI if you're over state pension age, but income tax continues at any age
NI has no personal allowance taper — income tax personal allowance reduces above £100,000, but NI thresholds stay the same
NI rates are flat — 8% then 2%. Income tax has 3 bands (or 6 in Scotland)
NI is earnings-based — only earned income (salary, wages) counts. Investment income, rental income, and pensions don't attract NI

Recent Changes

NI rates have changed significantly in recent years:

2022/23: Temporary 1.25% increase (Health and Social Care Levy)
2023/24: Cut from 12% to 10% (January 2024)
2024/25: Cut again from 10% to 8% (April 2024)
2025/26: Remains at 8% for employees

Use our salary calculator to see exactly how much NI you'll pay on your specific salary.