National Insurance is one of the biggest deductions from your pay packet, yet most people have no idea exactly how much they're handing over each month. Whether you're starting a new job, got a pay rise, or just want to understand your payslip better, this guide covers the 2026/27 rates, real examples, and how to calculate your own figure in under a minute.
National Insurance (NI) is a tax on earnings that funds the NHS, state pension, and certain benefits. As an employee, you pay Class 1 National Insurance — your employer also pays a separate employer contribution on top, which doesn't come out of your salary directly but affects the total cost of employing you.
The amount you pay depends entirely on your earnings. There's a lower threshold below which you pay nothing, a main rate band in the middle, and a reduced rate on higher earnings. HMRC collects it automatically through PAYE, so it comes straight off your wage before you see it — just like income tax.
It's worth knowing that NI and income tax thresholds are different. You start paying income tax at £12,570 (the Personal Allowance), and the Primary Threshold for NI happens to sit at the same figure in 2026/27 — but that hasn't always been the case, and the rates themselves are completely separate calculations.
For the 2026/27 tax year, employees pay 8% NI on weekly earnings between £242 and £967 (equivalent to £12,570 to £50,270 annually). On anything you earn above £50,270, the rate drops to 2%. Below £12,570, you pay nothing at all.
Here's a worked example. Say you earn £35,000 a year. Your NI-liable earnings are £35,000 minus £12,570, which gives £22,430. At 8%, that's £1,794.40 in National Insurance for the year — or roughly £149.50 a month coming off your pay.
If you earn £60,000, the calculation has two parts. You pay 8% on £37,700 (the band between £12,570 and £50,270), which is £3,016. Then you pay 2% on the remaining £9,730 above the upper limit, adding another £194.60. Total annual NI bill: £3,210.60 — about £267.55 per month.
If you're self-employed, you pay Class 4 NI rather than Class 1. For 2026/27, that means 6% on profits between £12,570 and £50,270, and 2% above that. Class 2 NI (previously a flat weekly charge) was abolished from April 2024, so most self-employed people only need to worry about Class 4, which you pay through your Self Assessment tax return.
Company directors are treated differently again. Because director pay is often structured as a mix of salary and dividends, their NI is calculated on an annual basis rather than week by week — which can affect how much is owed if salary varies across the year. Dividends themselves don't attract National Insurance, which is one reason many directors use this structure.
If you have multiple jobs or income sources, each employer deducts NI independently up to the upper earnings limit. That can sometimes mean you overpay NI overall. If that happens, you can claim a refund from HMRC — it's more common than people realise, and well worth checking if your circumstances have changed mid-year.
The Primary Threshold is £12,570 a year (£242 a week). You don't pay any employee National Insurance on earnings below this level.
On £30,000 a year, your NI-liable earnings are £17,430 (£30,000 minus £12,570). At 8%, that works out to £1,394.40 per year, or around £116.20 a month.
No. You only pay NI on earnings above the Primary Threshold of £12,570. The first £12,570 of your income is free from National Insurance entirely.
No, they're separate deductions. Income tax funds general government spending, while National Insurance specifically funds the NHS, state pension, and certain benefits. Both are collected via PAYE but calculated independently.
No. Once you reach state pension age, you stop paying employee National Insurance contributions, even if you continue working. Your employer still pays their own contributions on your earnings.
Yes — a take-home pay calculator that includes NI is the quickest way to verify what you should be paying and spot any errors on your payslip. CalcHubUK's free calculator covers both income tax and National Insurance for 2026/27.