Tax year: 2026/27 | Last reviewed: 2 October 2026
Class 4 National Insurance is a charge on qualifying self-employed profits, separate from Income Tax. For 2026/27, the main rate is 6%, with a 2% rate on profits above the upper limit. Do not confuse these self-employed rates with the Class 1 rates deducted from employees through payroll.
Class 4 rates for 2026/27
| Annual profits | Class 4 rate |
|---|---|
| Up to £12,570 (Lower Profits Limit) | 0% |
| £12,570 to £50,270 (Upper Profits Limit) | 6% |
| Over £50,270 | 2% |
The thresholds are aligned with the income tax Personal Allowance and higher rate threshold, both frozen until April 2031.
Worked examples
- Profit £20,000: (£20,000 less £12,570) x 6% = £445.80
- Profit £45,000: (£45,000 less £12,570) x 6% = £1,945.80
- Profit £80,000: £37,700 x 6% = £2,262, plus £29,730 x 2% = £594.60, total £2,856.60
At 9%, the £45,000 example would have cost £2,918.70, so the cuts save that sole trader nearly £1,000 a year.
How Class 4 is paid
Class 4 is calculated on your Self Assessment tax return and paid with your income tax on 31 January, plus payments on account on 31 January and 31 July. It is worked out on your taxable profits after allowable expenses and capital allowances, and after deducting trading losses brought forward.
Who does not pay Class 4?
- People over State Pension age at the start of the tax year
- People under 16 at the start of the tax year
- Some trustees, executors and non-residents
- Divers and diving supervisors working in UK waters, who pay Class 1 instead
Class 4 and your State Pension
Class 4 does not itself buy State Pension. Your qualifying year comes from having profits above the Small Profits Threshold (£7,105), which is treated as if Class 2 was paid. Read Class 2 NI abolished.
Sole trader or limited company?
Directors pay no NI on dividends, which is one reason a limited company becomes attractive as profits grow. But with Class 4 now at 6%, the NI saving is smaller than it was. Compare options with our salary and dividend calculator, or read sole trader tax 2026/27.
FAQs
What is the Class 4 NI rate for 2026/27?
6% on profits between £12,570 and £50,270 and 2% on profits above £50,270.
Is Class 4 paid on turnover?
No, on taxable profits only.
Can I pay Class 4 monthly?
You can set up an HMRC budget payment plan to pay towards your January bill weekly or monthly.
Talk it through with Digivolve
We calculate your Class 4 alongside income tax every year and show you exactly how your January bill is made up.
This article is general information based on the rules for the 2026/27 tax year as at October 2026. It is not personal tax advice. Rates and thresholds can change, so please speak to us before acting.