If you work for yourself as a sole trader, sorting out your National Insurance is one of the first money jobs on your list. The amount you pay depends on your profits, not your turnover, and the rates and thresholds change with each tax year. For 2025/26, most self-employed people pay two classes of contribution: Class 2 and Class 4. Get the numbers right and you protect your State Pension record. Get them wrong and you could face a bill, plus penalties, from HMRC.
What National Insurance is when you are self-employed
National Insurance is not income tax. It is a separate contribution that builds your entitlement to the State Pension, Maternity Allowance, bereavement support, and some contribution-based benefits. When you are employed, your employer deducts National Insurance through PAYE and pays employer contributions on top. When you are self-employed, you calculate the amount yourself and pay it through Self Assessment.
Most self-employed people face two classes of contribution. Class 2 is a flat weekly amount. Class 4 is a percentage of your profits above a set threshold. The two work side by side, so you may owe both in the same year.
Class 2 National Insurance: the flat weekly charge
For 2025/26, Class 2 is a flat weekly charge of £3.50 (GOV.UK, 2025). You pay it if your annual profits are at or above the Small Profits Threshold of £6,725 (GOV.UK, 2025). If your profits fall below that figure, you do not pay Class 2 automatically.
When voluntary Class 2 makes sense
You can choose to pay Class 2 voluntarily, even when your profits are low. A full year of contributions protects your State Pension record. It can also help you qualify for Maternity Allowance if you later become pregnant while self-employed. For 2025/26, voluntary Class 2 costs the same £3.50 a week, which adds up to £182 for the year. That is usually far cheaper than filling gaps later with Class 3 contributions.
HMRC collects Class 2 through your Self Assessment tax return. It simply appears on your final bill, so you do not need a separate direct debit.
Class 4 National Insurance: the profit-related bill
Class 4 depends directly on your trading profit. For 2025/26, you pay nothing on the first £12,570 of profit, which is the Lower Profits Limit. You then pay 6% on profits between £12,570 and £50,270, the Upper Profits Limit. You then pay 2% on any profit above £50,270 (GOV.UK, 2025).
Example: £35,000 profit in 2025/26
On £35,000 profit, you deduct the £12,570 Lower Profits Limit. You then pay 6% on the remaining £22,430, which comes to £1,345.80. You also pay Class 2 of £182. Your total National Insurance bill would be £1,527.80.
Example: £60,000 profit in 2025/26
On £60,000 profit, the calculation uses both rates. You pay 6% on the band between £12,570 and £50,270. That is £37,700 at 6%, which equals £2,262. You then pay 2% on the £9,730 above the upper limit, which is £194.60. Add Class 2 of £182 and your total National Insurance bill would be £2,638.60.
Class 4 does not add to your benefit entitlements. It is a legal charge on profit, not a contribution that buys extra State Pension.
How to pay National Insurance when you are self-employed
You pay both classes through your Self Assessment tax return. The deadline for filing online and paying the balance for 2025/26 is 31 January 2027. The deadline for paper returns falls earlier, on 31 October 2026, although most self-employed people file online (GOV.UK, 2025).
Payments on account
If your Self Assessment bill is more than £1,000, HMRC normally asks for payments on account. These are advance payments towards next year’s bill. For the 2025/26 tax year, the two payments on account are due by 31 January 2027 and 31 July 2027. Keep your books current so you can estimate what you owe.
Ways to pay
You can pay through HMRC’s online service, by bank transfer, by debit card, or through the HMRC app. HMRC no longer accepts personal credit cards for Self Assessment, so do not rely on one. Set money aside each month so the January bill does not derail your cash flow. Check the latest deadlines on the HMRC Self Assessment deadlines page.
Record keeping and common mistakes
One of the costliest errors is missing the Self Assessment registration deadline. You must register by 5 October after the end of your first tax year of trading. If you started self-employment between 6 April 2025 and 5 April 2026, your registration deadline is 5 October 2026 (GOV.UK, 2025). Late registration can lead to penalties.
Another mistake is using turnover instead of profit. Your National Insurance bill depends on profit after allowable expenses, not on every pound that comes in. Track expenses such as office supplies, travel, and a portion of your home-working costs. Good records can cut your Class 4 bill significantly. Read our guide on Allowable Expenses for the Self-Employed for a full list.
Women should also watch gaps caused by maternity, caring responsibilities, or very low-profit years. If your profits drop below the Small Profits Threshold, paying voluntary Class 2 can keep your National Insurance record intact. This matters for the State Pension and for benefits such as Maternity Allowance.
What your National Insurance contributions buy you
Class 2 contributions count towards the 35 qualifying years you need for the full new State Pension (GOV.UK, 2025). They also help you qualify for Maternity Allowance and Bereavement Support Payment. That is why a low-profit year is not a reason to ignore Class 2 entirely.
Class 4 contributions do not increase your benefit entitlements. They are simply a profit-based charge. You must still pay them if your profits are high enough, but they do not buy you extra State Pension.
Think of your bill in two parts. Class 2 protects your future. Class 4 reflects your current success. Budget for both from your first profitable month. You can check the latest rates on the GOV.UK self-employed National Insurance page.
Running your own business brings freedom, but the admin is real. For the full 2025/26 tax picture, read our Self Employed Tax UK guide. To find out what you can claim against profit, see our guide on Allowable Expenses for the Self-Employed. And for the latest data on women in business, visit our UK Women in Business Facts page.
