When you’re self-employed it’s your responsibility to make sure you pay the right amount of tax on the income you earn each year, by submitting either Self Assessment tax returns or using MTD Income Tax depending on which one you need.
Sending your tax return doesn’t just deal with income tax though, and your bill can also include any National Insurance that you owe on your self-employment income. In this article we’ll explain how National Insurance works for self-employed people.
What is National Insurance?
Anyone aged 16 or over, up until they reach State Pension age, pays National Insurance on any employment or self-employed income they get over a specific amount.
This wording is quite important, because not all types of income are subject to National Insurance. For instance, dividends, and sometimes even rental income you get from property if this isn’t your main business, can be free from NI.
Why do I need to pay National Insurance if I work for myself?
Making NI contributions gives you entitlement to certain benefits and the State Pension. National Insurance contributions also help to fund the NHS.
How much NI will I need to pay?
There are different types of National Insurance, known as classes, and these have different thresholds and rates. The type you pay depends on how much you earn from a particular source of income. For instance, employees normally pay Class 1 NI on income they earn from an employer, whereas self-employed people pay Class 4 NI.
Class 4 National Insurance for self-employed people
Class 4 NI is charged as a percentage of the profits you make from being self-employed.
- Lower Profits Limit (LPL): You’ll pay NI at a rate of 6% on any profits you earn in 2025/26 and 2026/27 which are over the £12,570 Lower Profits Limit
- Upper Profits Limit (UPL): You’ll then pay Class 4 NI at a rate of 2% on any profits over £50,270
What happens if I don’t pay NI?
Paying Class 4 NI is mandatory if your profits reach the threshold, but not everyone will earn enough to reach it. If your profits are above the Small Profits Threshold (£7,105 in 2026/27, or £6,845 for the 2025/26 tax year) then you’ll get NI ‘credits’, which protects your entitlement. If your profits are below it, then you might consider making voluntary contributions to cover any gaps.
For self-employed people this means making Class 2 contributions (which used to be compulsory, but are now voluntary) at a flat rate of £3.50 per week for the 2025/26 tax year, or £3.65 for 2026/27.
How do I register to pay self-employed National Insurance?
You’re automatically signed up for National Insurance and any other tax contributions that you need to make when you register for Self Assessment with HMRC.
When and how do I pay my NICs?
HMRC will use the information you provide in your Self Assessment tax return to work out your tax bill. The total amount will consist of any income tax and National Insurance you owe, as well as any other taxes you need to pay.
The deadline to submit your tax return and pay the bill for Self Assessment is 31st January following the end of the tax year that you need to report. You can submit your return much earlier, but this doesn’t affect the payment deadline – which can be useful if you need to budget for it!
Find out more about getting support with your finances and tax in our guide to finding the right accountant.
