National Insurance
National Insurance is a UK tax on earnings that builds State Pension entitlement; employees pay 8% between £12,570 and £50,270 and 2% above in 2026/27.
National Insurance (NI) is a UK tax on earnings that counts towards your State Pension and some benefits. Employees pay Class 1 NI through payroll.
According to GOV.UK, for 6 April 2026 to 5 April 2027 a category A employee pays:
- 0% on weekly earnings up to £242 (£1,048 a month);
- 8% on earnings from £242.01 to £967 a week (£1,048.01 to £4,189 a month);
- 2% on earnings over £967 a week (£4,189 a month).
Over a year these thresholds work out at £12,570 and £50,270, matching the Income Tax bands.
Example: on a £40,000 salary paid evenly, you pay 8% on £27,430 (£40,000 minus £12,570), which is £2,194.40 a year.
Pension contributions made through salary sacrifice reduce the pay NI is charged on. See NI next to Income Tax in the UK take-home pay calculator.
Tools that use it
Guides that explain it
- How to read your payslip: every line explained, with an example
- Making Tax Digital for Income Tax: does it apply to you, and when?
- National Insurance rates 2026/27: what you pay and how it works
- Payments on account: when they're due and how to reduce them
- The 60% tax trap: how the £100,000 Personal Allowance taper works