National Insurance is one of those things that just vanishes from your payslip every month. Most people know it exists, fewer people know exactly how much they're paying, and almost nobody understands why it's separate from income tax in the first place.
Let's fix that. Here's a straightforward guide to National Insurance rates for the 2025/26 tax year (6 April 2025 to 5 April 2026) — what you'll pay as an employee, what your employer pays on top, and what changes if you're self-employed.
If you're employed, NI gets deducted from your pay automatically. You'll see it on your payslip as "NI" or "National Insurance" — it's separate from income tax, even though HMRC collects both.
| Earnings Band | NI Rate |
|---|---|
| Up to £12,570 (Primary Threshold) | 0% |
| £12,571 – £50,270 (Upper Earnings Limit) | 8% |
| Above £50,270 | 2% |
You'll notice the thresholds look familiar — £12,570 and £50,270 are the same numbers used for income tax. That's deliberate. The government aligned them a few years back to simplify things. But don't confuse the two: NI and income tax are completely separate charges with different rules about what counts as "earnings."
The big difference? National Insurance only applies to employment earnings and self-employment profits. It doesn't touch your pension income, savings interest or dividends. So a retired person pulling £30,000 from their pension pays income tax but zero NI. Meanwhile, someone earning £30,000 from a job pays both.
Here's the bit that doesn't show up on your payslip but absolutely affects your employer's budget. Employers pay their own NI on top of what you pay — and from April 2025, it went up.
| Detail | 2025/26 Rate |
|---|---|
| Rate | 15% (up from 13.8%) |
| Threshold | £5,000 per employee |
That's right — employers start paying NI once your salary exceeds just £5,000 a year, not £12,570 like employees. And at 15%, it's nearly double the employee rate. For a worker on £35,000, the employer is paying an extra £4,500 in NI on top of the salary. This is why you'll sometimes hear people say "the real cost of an employee is much more than their salary."
There is some relief, though. The Employment Allowance lets eligible businesses knock up to £10,500 off their total employer NI bill each year. Small businesses with only a handful of staff can sometimes wipe out their employer NI entirely.
If you're self-employed, NI works differently. You pay two types:
A flat rate of £3.45 per week (about £179 a year). You pay this if your profits are above the Small Profits Threshold of £6,725. It's basically your ticket to the state pension and certain benefits. It's cheap, and honestly, it's worth paying even voluntarily if your profits are low — it keeps your NI record clean.
This is the one that actually hurts. It's calculated on your annual profits:
| Profit Band | NI Rate |
|---|---|
| Up to £12,570 | 0% |
| £12,571 – £50,270 | 6% |
| Above £50,270 | 2% |
Notice the self-employed rate is lower than the employee rate (6% vs 8%). That's always been the case — partly because self-employed people don't get the same benefits (no statutory sick pay, for instance) and partly because there's no employer picking up the other side of the bill.
You can work out the exact amounts using our self-employed tax calculator.
People often lump NI and income tax together, and on the surface they do look similar — they're both percentage-based deductions from your earnings. But there are some important differences worth knowing:
In practice, if you want to know your total deductions, you need to add both together. On a £35,000 salary, you're paying income tax and NI. Let's do that calculation now.
Let's say you earn £35,000 a year as an employee. Here's exactly how your National Insurance is calculated:
Step 1: Earnings up to £12,570 — no NI. This is below the Primary Threshold.
Step 2: Earnings from £12,571 to £35,000. That's £22,430 in the 8% band.
£22,430 × 8% = £1,794.40
Step 3: Nothing above £50,270, so the 2% band doesn't apply.
Total employee NI: £1,794.40 per year
That works out to about £149.53 per month. On top of your income tax of £4,486 (which you can verify with our income tax calculator), your combined deductions before any other adjustments come to roughly £6,280 a year.
Meanwhile, your employer is also paying NI on your behalf: 15% on everything above £5,000, which comes to £4,500. You never see this money — it doesn't appear on your payslip — but it's a real cost your employer pays to HMRC every month.
Enter your salary and get a full NI breakdown — employee contributions, employer contributions and take-home pay.