In 2026/27 an employee pays Class 1 National Insurance of 8% on earnings between £12,570 and £50,270, and 2% on anything above £50,270. It is taken from your pay alongside income tax, but it is a separate charge with its own thresholds. NI helps build your entitlement to certain benefits, including the State Pension.
What National Insurance is
National Insurance contributions (NICs) are paid by workers and employers and count towards contributory benefits and the State Pension. The type you pay depends on how you work. Employees pay Class 1 through payroll. Self-employed people pay different classes through Self Assessment, which this guide does not cover.
Unlike income tax, NI is worked out on each pay period’s earnings rather than across the whole year, and it is not reduced by a Personal Allowance. It simply starts above a threshold.
The employee rates for 2026/27
| Annual earnings | Rate |
|---|---|
| Up to £12,570 | 0% |
| £12,570 to £50,270 | 8% |
| Above £50,270 | 2% |
Employers pay their own NI on top, which does not come out of your pay. Employer contributions are not in our calculator because they do not affect what you take home.
Because the thresholds match the income tax Personal Allowance and the higher-rate start for most people, it is easy to assume the two taxes are the same thing. They are not: NI drops from 8% to 2% at £50,270, while income tax rises from 20% to 40% at the same point.
Worked example: £30,000, £50,000 and £60,000
Using the UK take-home pay for a standard employee in England with no pension:
| Salary | Income tax | National Insurance | Take-home a year |
|---|---|---|---|
| £30,000 | £3,486 | £1,394 | £25,120 |
| £50,000 | £7,486 | £2,994 | £39,520 |
| £60,000 | £11,432 | £3,211 | £45,357 |
Check the £50,000 figure by hand: £50,000 − £12,570 = £37,430, and 8% of £37,430 is £2,994.40. For £60,000, the 8% band gives £37,700 × 8% = £3,016, and the remaining £9,730 above £50,270 at 2% adds £194.60, making £3,210.60.
Notice how NI barely rises between £50,000 and £60,000 because of the lower 2% rate, while income tax climbs quickly. For more on the income tax side, see UK income tax explained: bands, allowance and how it's worked out.
How pension contributions change NI
How you pay into a workplace pension affects the NI bill. With net pay and relief at source, NI is still charged on your full earnings. With salary sacrifice, your pay is formally reduced before NI is calculated, so you pay less NI too. On a £50,000 salary with a 5% contribution, our calculator shows NI of £2,994 under net pay and £2,794 under salary sacrifice. The full comparison is in Net pay, salary sacrifice or relief at source: how pension contributions affect your pay.
Salary sacrifice has trade-offs, such as a lower contractual salary that can matter for mortgage applications or some benefits, so check with your employer.
Checking your payslip
Your payslip shows NI as a separate line, often headed “NI” or “National Insurance”. If it looks different from the estimate, possible reasons are:
- you were paid weekly or four-weekly, so thresholds are applied per period
- a bonus fell in one month, which can push that month’s NI up
- you have a different NI category letter, which changes the rates
- salary sacrifice or other deductions reduce earnings before NI
Note: This is general information, not tax advice. Rates and thresholds can change; check GOV.UK for the latest figures and your own category letter.
Common questions about NI categories
Most employees are in category A, which uses the standard rates above. Other category letters exist for groups such as younger workers, apprentices, people over State Pension age and some others, and they change the rate that applies. The letter is shown on your payslip. If you think it is wrong, ask your employer or HMRC, because a wrong letter can lead to overpaying or building up the wrong record.
It is also worth checking your National Insurance record on GOV.UK from time to time. Gaps can sometimes be filled, which may improve your State Pension entitlement, but the rules on this are detailed, so read the official guidance first.
Try the calculator
Put your salary into the UK take-home pay to see National Insurance next to income tax, student loan and pension. If you are starting from an hourly rate, work out the yearly figure first using How to work out your take-home pay from a UK salary.
Open the free UK take-home pay
Worked example 2: £25,000, £40,000 and £100,000
Here are three more salaries for an employee in England with no pension, student loan or other deductions (from our take-home pay calculator, 2026/27):
| Salary | Income tax | National Insurance | Take-home a year | Tax and NI as a share of pay |
|---|---|---|---|---|
| £25,000 | £2,486 | £994 | £21,520 | 13.9% |
| £40,000 | £5,486 | £2,194 | £32,320 | 19.2% |
| £100,000 | £27,432 | £4,011 | £68,557 | 31.4% |
Check the £100,000 NI by hand. The 8% band covers £37,700 (from £12,570 to £50,270), which is £3,016. The remaining £49,730 above £50,270 is charged at 2%, which is £994.60. Total £4,010.60. At £25,000 the NI is 8% of £12,430, which is £994.40.
At £100,000, NI is only about 4% of pay, against about 6% at £50,000 (£2,994) and 4% at £25,000, because the rate drops to 2% above £50,270. Income tax does the heavy lifting at higher earnings.
The two NI thresholds step-by-step
To work out your own Class 1 NI for a year of steady pay:
- Take your annual earnings subject to NI. This includes salary, bonuses and overtime but may exclude some deductions, such as salary sacrifice contributions.
- Subtract £12,570. If the answer is zero or negative, you pay no NI.
- Take the lower of that figure and £37,700 (the width of the 8% band) and multiply by 8%.
- If earnings are above £50,270, multiply the excess by 2%.
- Add the two figures together.
In practice payroll applies the thresholds to each pay period, so weekly or monthly results can differ from a simple annual estimate if pay is uneven. That is why a large bonus can lead to an NI deduction that looks high in one month.
NI, income tax and take-home pay compared
Two things people often confuse are how NI differs from income tax and how each interacts with pension contributions.
| Income tax | Employee NI | |
|---|---|---|
| Starts above | Personal Allowance of £12,570 (can be reduced above £100,000) | £12,570 |
| Main rate | 20% | 8% |
| Higher rate | 40% above £50,270 of income (with a full allowance) | 2% above £50,270 |
| Region | Scotland has its own bands | Same across the UK |
| Reduced by net pay pension | Yes | No |
| Reduced by salary sacrifice | Yes | Yes |
On £50,000 with a 5% pension, our calculator shows income tax of £6,986 and NI of £2,994 under net pay, against tax of £6,986 and NI of £2,794 under salary sacrifice. Take-home is £37,520 under net pay and £37,720 under sacrifice, a £200 difference that is the 8% NI saved on the £2,500 contribution. Your pension pot, and any employer top-up, depends on your scheme terms. The How to work out your take-home pay from a UK salary guide shows the full chain from gross to net.
Common mistakes to avoid
- Adding NI to income tax as one rate. They have different thresholds and rates, so calculate each separately.
- Expecting NI to fall with a pension. It only falls with salary sacrifice, not with net pay or relief at source.
- Assuming a refund is automatic. If you overpaid because of a wrong category letter, contact your employer or HMRC.
- Forgetting the self-employed rules. Self-employed people pay different classes. See Self-employed tax explained: income tax, National Insurance and payments on account.
- Quoting the wrong tax year. Rates and thresholds can change, so check GOV.UK for the year you need.
When to check with an official source
Look at your personal tax account on GOV.UK to check your NI record, years counted towards the State Pension and whether you have gaps. Contact HMRC or your payroll team if your category letter looks wrong, if you have more than one job, or if you work for part of the year abroad. Rules for those cases are detailed and personal.
Why NI matters for your State Pension
NI is not only a deduction. Each year in which you pay enough contributions, or are credited with them, can count as a qualifying year towards the State Pension and some other contributory benefits. How many years you need for a full State Pension depends on current rules, so check GOV.UK rather than relying on a number you have heard. If you are close to State Pension age, or have spent time abroad, looked after children or been out of work, look at your NI record through your personal tax account. Sometimes you can pay voluntary contributions to fill a gap, but it is worth confirming the cost and the benefit first. For later-life planning, Net pay, salary sacrifice or relief at source: how pension contributions affect your pay covers the workplace side.
Quick estimate for your own pay
A fast way to estimate your yearly employee NI if you earn between £12,570 and £50,270 is to subtract £12,570 from your salary and take 8%. At £35,000 that is £22,430 × 8% = £1,794.40 (hand calculation). Dividing by 12 gives roughly £150 a month, although the exact payslip figure depends on your pay frequency and category letter. Above £50,270, add 2% of the excess. Use this as a sense check against your payslip, not as a replacement for payroll.
Frequently asked questions
Do I pay National Insurance on a pension or savings income?
Employee Class 1 NI is charged on earnings from employment, not on investment income. Check GOV.UK for how other income is treated.
Do I still pay NI after reaching State Pension age?
Employees generally stop paying Class 1 NI once they reach State Pension age, although employers still pay theirs. Check GOV.UK to confirm your position.
Does NI count towards my State Pension?
Yes, contributions build up qualifying years that count towards the State Pension. Your record is available through your personal tax account on GOV.UK.
Why is NI lower than income tax at the same salary?
The rates are lower (8% against 20% in the main band) and NI has no allowance, only a starting threshold. The two are calculated separately.
Is there a minimum earning level before I pay NI?
Employee Class 1 NI starts on earnings above £12,570 a year in 2026/27, applied per pay period by payroll. Below it you pay none, though your record may still be credited. Check GOV.UK.
Do I pay NI on a second job?
Usually each job is treated separately, so thresholds apply to each employment. Check GOV.UK for how your situation is treated.
Does a bonus attract NI?
Yes, a bonus counts as earnings for Class 1 NI, and it is charged at the rate that applies in the pay period it is paid.
Where can I see my NI record?
In your personal tax account on GOV.UK, which shows your contribution history and State Pension forecast.