National Insurance Contributions (NICs) sit alongside Income Tax on your payslip. If you are an employee, you pay Class 1 National Insurance, and your employer pays a separate amount on top. This guide covers the employee side — the bit that comes out of your pay.
The 2026/27 rates and thresholds
| Earnings | Rate |
|---|---|
| Up to £12,570 (the Primary Threshold) | 0% |
| £12,570 to £50,270 (the Upper Earnings Limit) | 8% |
| Above £50,270 | 2% |
So you pay nothing on the first £12,570, then 8% on earnings up to £50,270, and just 2% on everything above that. The 2% top rate is why National Insurance takes a smaller bite of higher salaries than Income Tax does.
It's based on each job separately
Unlike Income Tax — which looks at your total income — National Insurance is worked out for each job on its own, and each job gets its own £12,570 threshold. This has a surprising effect: a small second job earning under £12,570 pays no National Insurance at all, so two jobs can pay less NI than one job on the same total pay. We cover this in the second job calculator.
What National Insurance pays for
Your contributions build your entitlement to certain benefits — most importantly the State Pension. You generally need around 35 qualifying years to get the full new State Pension, and at least 10 to get any. NICs also count towards things like contribution-based benefits. It is not a personal pot; it funds today's payments, but your record determines what you can claim.
Frozen thresholds
Like the Income Tax thresholds, the National Insurance thresholds are frozen. As wages rise, more of your pay falls into the 8% band, so the effective bite creeps up over time even though the headline rate is unchanged.
A worked example
On a £40,000 salary, National Insurance is charged on the £27,430 above £12,570, at 8% — about £2,194 a year. On £60,000, you pay 8% up to £50,270 and 2% on the rest, totalling roughly £3,211. The take-home calculator shows the exact figure for any salary, alongside Income Tax and pension.
In short
Employee National Insurance is 8% between £12,570 and £50,270, then 2% above — worked out per job, with each job getting its own threshold. It is the contribution that builds your State Pension, and like Income Tax its frozen thresholds mean it quietly takes a little more each year.