Chapter 4

National Insurance for the self-employed

Learn about National Insurance rates and National Insurance contributions for self-employed people.

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Do the self-employed pay National Insurance?

If you’re self-employed, you are responsible for paying your own National Insurance contributions.

National Insurance contributions are usually calculated and paid through your annual self assessment.

How much National Insurance do self-employed pay?

Self-employed people pay two types of National Insurance:

On profits of £6,725 or more a year, you pay Class 2 National Insurance contributions of £3.15 a week.

If your profits are £11,909 or more a year you will also pay Class 4 National Insurance contributions. These amount to 10.25% on profits between £11,909 and £50,270.

On any profits over £50,270, you will pay 3.25% (in addition to the above).

If you are an employee who also does some self-employed work, your employer will deduct Class 1 National Insurance contributions from your wages.

You may still have to pay Class 2 and 4 National Insurance contributions on your self-employed income. How much you pay in total depends on your combined PAYE wages and self-employed work.

It will be Class 2 and Class 4 if earnings are above £11,909 (assuming no employment income). It would be Class 2 only if your earnings are between £6,725 and £11,909.

If a taxpayer has no other source of income and their earnings are below £6,725, they can voluntarily pay Class 2 - which would mean their entitlement to state benefits is retained and there are no gaps in their state pension record.

HMRC will let you know how much National Insurance you owe once you’ve filed your self assessment tax return.

Disclaimer

Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the provided content.

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