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
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.