National Insurance is split: Class 1 (employees, paid via PAYE) and Class 4 (self-employed, paid via Self Assessment). Class 2 was effectively abolished in April 2024 for most. This calculator shows what you owe across both classes given your mix of PAYE and self-employment income.
Class 1 NI on PAYE: (£25,000 − £12,570) × 8% = £994.40. No self-employment income, so Class 4 = £0. NI is the second deduction from your salary after income tax.
Pure self-employment — £30,000 profit
PAYE £0 · Self-employment £30,000 · Rest of UK
No PAYE → no Class 1 NI. Class 4 NI on self-employment: (£30,000 − £12,570) × 6% = £1,045.80. Self-employed pay 2pp less NI than employees in the basic-rate band (6% vs 8%).
Mixed PAYE + self-employment — £25k + £8k
PAYE £25,000 · Self-employment £8,000 · Rest of UK
Class 1 NI on £25k PAYE: £994.40 (unchanged from previous example). Class 4 NI on £8k self-employment: zero — the £8k is below the £12,570 Class 4 lower threshold when standalone. Total NI: £994.40 across both classes. Mixed earners hit Class 4 only once self-employment profit alone exceeds £12,570.
PAYE £40,000 · Self-employment £15,000 · Rest of UK
Class 1 NI on £40k PAYE: (£40,000 − £12,570) × 8% = £2,194.40. Class 4 NI on £15k self-employment: only the portion above £12,570 attracts NI = £2,430 × 6% = £145.80. Total NI: £2,340.20. Worth noting: Class 4 NI thresholds are independent of PAYE NI thresholds — each class has its own £12,570 floor.
High earner — £100k PAYE, no side income
PAYE £100,000 · No self-employment · Rest of UK
Class 1 NI on £100k: main rate band (£12,570 → £50,270) at 8% = £3,016. Above £50,270 (the upper earnings limit), rate drops to 2% — (£100,000 − £50,270) × 2% = £994.60. Total Class 1: £4,010.60. The 2% rate above UEL is why higher earners’ marginal NI burden is lower than basic-rate earners’ (2% vs 8%) — the system caps NI’s marginal cost.
National Insurance is the UK’s second income-based tax. It funds state pensions, NHS contributions, and certain statutory benefits. It’s split into classes by earner type:
Class 1: employees (paid via PAYE on top of income tax)
Class 2: self-employed (effectively abolished April 2024 for most)
Class 3: voluntary (fill gaps in your NI record)
Class 4: self-employed (paid via Self Assessment on profits)
The calculator above computes Class 1 + Class 4 across PAYE and self-employment income.
Class 1 NI — paid by employees on PAYE
Standard rates 2025-26:
£0 → £12,570 (primary threshold): 0%
£12,570 → £50,270 (upper earnings limit): 8% main rate
Above £50,270: 2% upper rate
Calculated each pay period by your employer’s payroll. Reconciled annually via tax code adjustments if needed.
A £35,000 salary attracts £1,794.40 of Class 1 NI annually (£149.53/month). A £100,000 salary attracts £4,010.60 (£334.22/month) — the high earner pays a smaller percentage of total earnings (4.0%) than the basic-rate earner does (5.1% on £35k).
Class 4 NI — paid by self-employed on profits
Standard rates 2025-26:
£0 → £12,570 (lower profits limit): 0%
£12,570 → £50,270 (upper profits limit): 6% main rate
Above £50,270: 2% upper rate
Paid via Self Assessment in January (alongside income tax). Calculated on net profit (after legitimate business expenses).
A £30,000 profit attracts £1,045.80 of Class 4 NI. The threshold structure mirrors Class 1 but at 6% / 2% rather than 8% / 2% — the 2pp gap recognises that self-employed don’t access all employee statutory benefits.
Class 2 — what changed in April 2024
Before April 2024, self-employed profits above £6,725 (the small profits threshold) automatically triggered Class 2 NI at £3.45/week (~£180/year). This created a small but mandatory addition to the self-employment tax bill.
From 6 April 2024, Class 2 was effectively abolished for those above the small-profits threshold. You’re now treated as if you’d paid Class 2 for state-pension and contributory-benefit purposes without actually paying. Voluntary Class 2 contributions are still possible (£3.45/week) for those who want to maintain a complete record below the threshold.
NI vs Income Tax — when each applies
The two work in parallel but with different rules:
Treating Class 1 and Class 4 NI as the same. They aren’t. Class 1 is paid by employees on PAYE income at 8% (basic) / 2% (above UEL). Class 4 is paid by self-employed on business profits at 6% / 2%. The 2pp difference reflects that self-employed don’t get statutory benefits like sick pay or maternity pay through NI.
Forgetting employer NI. Employer NI (13.8% above £5,000 secondary threshold) is paid by your employer on top of your salary. It doesn’t appear on your payslip but it’s part of your total cost to the company. Self-employed don’t have this — they pay only Class 4 (and historically Class 2). Employer NI is the structural difference that makes ‘employed’ more expensive than ‘self-employed’ from the company’s perspective.
Assuming Class 2 NI still exists. It was effectively abolished from April 2024 for most self-employed earning above the small profits threshold. Voluntary contributions are still possible (£3.45/week) for state-pension protection, but they’re optional. Many old guides still mention Class 2 — if you started self-employment after April 2024, you don’t pay it automatically.
Mixing up income tax thresholds with NI thresholds. They happen to align at £12,570 (PA = primary threshold = Class 4 lower) and £50,270 (basic-rate boundary = upper earnings limit) for 2025-26 in rest of UK. But Scotland’s income tax bands are different from UK-wide NI thresholds — Scottish higher-rate kicks in at £43,663 for income tax, but NI still uses £50,270 as the rate-change point UK-wide.
Forgetting that NI is per-job for employees. If you have two PAYE jobs, each job calculates Class 1 NI independently against £12,570 thresholds — meaning you might overpay NI overall. HMRC reconciles this at year-end via your tax code or P800 statement. Self-employment Class 4 always treats your total profit as one bucket.
What this calculator doesn't cover
Class 2 NI (voluntary contributions for state pension) not modelled. Currently £3.45/week if you choose to pay.
Doesn’t model the small profits threshold for self-employed (£6,725) — at this level Class 2 was previously triggered automatically; the post-April-2024 system uses £6,725 only as a voluntary-payment indicator.
Multi-job PAYE complications not modelled — assumes single PAYE source.
Doesn’t model salary sacrifice, which reduces NI-able earnings (e.g. pension salary-sacrifice reduces both income tax and Class 1 NI on the sacrificed amount).
Tax bands are 2025-26. April 2026 introduces 2026-27 bands.
Assumes UK residency for tax purposes. Non-resident tax treatment is different.
Frequently asked questions
Why is Class 4 NI lower than Class 1 NI?
Class 1 NI (employees) is currently 8% in the basic-rate band; Class 4 NI (self-employed) is 6%. The 2pp gap reflects that self-employed people don’t access certain employee statutory benefits funded by NI — Statutory Sick Pay, Statutory Maternity Pay, Statutory Paternity Pay, etc. Self-employed claim equivalents directly via Department for Work and Pensions on a different schedule.
Do I have to pay Class 2 NI as a sole trader?
No — Class 2 was effectively abolished for most self-employed from 6 April 2024. If your self-employment profits are above the small profits threshold (£6,725), you’re treated as if you’d paid Class 2 for state-pension purposes without actually paying it. Voluntary Class 2 contributions are still possible (£3.45/week, ~£180/year) but only worth it if you’re below the small-profits threshold and want to maintain a complete state-pension record.
What's the difference between primary threshold and upper earnings limit?
Primary threshold (£12,570 in 2025-26) is where Class 1 NI starts. Below this, you pay no NI. Upper Earnings Limit (UEL, £50,270 in 2025-26) is where Class 1 NI rate drops from 8% to 2%. So someone earning £100k pays NI at 8% on £37,700 of their salary and 2% on the rest. Class 4 has equivalent boundaries (lower profits limit £12,570; upper profits limit £50,270) with rates of 6% / 2%.
Does NI apply on bonuses?
Yes. Class 1 NI is calculated on total earnings each pay period, including bonuses. A £5,000 bonus on top of a £45k salary may straddle the upper earnings limit — the portion below £50,270 attracts 8% NI, the portion above attracts 2% NI. HMRC PAYE reconciles the rates monthly (or weekly). Year-end totals match what you’d expect at your overall income level.
What about employer NI?
Employer NI is 13.8% above the secondary threshold (£5,000 from April 2025). It’s paid by your employer on top of your salary — never deducted from your pay. UK total cost of employment is approximately: gross salary + employer NI (13.8% above £5,000) + employer pension contributions. The calculator doesn’t show employer NI because it doesn’t affect your take-home, but it’s the biggest reason why ‘cost of employment’ to a UK company is ~13% above the salary they pay you.
Are Class 4 NI thresholds the same in Scotland?
Yes — National Insurance is UK-wide. Scotland has its own income tax bands but identical NI rules. The lower profits limit is £12,570, upper profits limit is £50,270, main rate is 6%, upper rate is 2% — same in Edinburgh, Cardiff, Belfast, and Birmingham. Only income tax differs.
How does NI affect my state pension?
Each year you pay NI (or are credited with NI through certain benefits/circumstances) counts as one ‘qualifying year’ toward your state pension. You need 35 qualifying years for the full new state pension (£221.20/week in 2025-26). Self-employed Class 4 NI counts the same as Class 1 toward your record. If you have gaps in your record, voluntary Class 3 contributions (£17.45/week) can fill them — generally good value at current rates.
Why do high earners pay 2% NI above £50,270?
Historical political compromise. NI was originally framed as ‘contributory’ — you pay in, you get benefits out. But there’s a cap on what state benefits anyone can receive, so policy decided that high earners shouldn’t pay unlimited NI. The 2% rate above UEL is a ‘token’ contribution that maintains the pretence of universality without making NI proportional all the way up. From a tax-incidence view, NI is regressive above £50,270 — middle earners face higher marginal NI than top earners.
About this calculator. Maintained by Jordan —
a UK seller and creator who actually uses these platforms (Etsy, eBay, Vinted, DistroKid).
Built to be accurate, mobile-fast, and honest about its limits. Spot a bug? Email
hello@payoutmath.co.uk.