National Insurance is the second biggest deduction from your pay after income tax. For 2025/26, employees pay 8% on earnings between £12,570 and £50,270, and 2% on everything above £50,270.
Here is how NI works at different salary levels:
£20,000 salary: £594 NI per year (£50 per month) £30,000 salary: £1,394 NI per year (£116 per month) £40,000 salary: £2,194 NI per year (£183 per month) £50,000 salary: £2,994 NI per year (£250 per month) £60,000 salary: £3,194 NI per year (£266 per month) £80,000 salary: £3,594 NI per year (£300 per month)
Notice how the increase slows down above £50,270 because the rate drops from 8% to just 2%. This is why NI is sometimes described as a regressive tax — lower earners pay a higher percentage than higher earners.
For self-employed people, the rates are different. You pay Class 4 NI at 6% on profits between £12,570 and £50,270, and 2% on profits above that. Class 2 NI has been effectively abolished for most self-employed people from 2024/25.
Your employer also pays NI on your salary at 13.8% on earnings above £5,000 (the secondary threshold). This is why salary sacrifice is so effective — it saves employer NI as well as your own.
NI contributions build your entitlement to the State Pension and some other benefits. You need 35 qualifying years for the full State Pension. Check your NI record on the HMRC website to see if you have any gaps.
Use our take-home pay calculator to see your exact NI deductions.