National Insurance (NI) is a statutory contribution paid by almost every UK earner and employer. This funds the state pension, the NHS, and a range of contributory benefits, so understanding it matters whether you’re an employee, a business owner, or self-employed.
The 2026/27 tax year carries over the rate and threshold structure set out in recent budgets, including the higher employment allowance and the removal of Class 2 contributions for the self-employed. In our blog below, we set out exactly what National Insurance will cost you this fiscal year, and how to plan around it, and how our services can assist you.
NI Rates for 2026/27 at a Glance
For the 2026/27 tax year:
- Employees pay 8% National Insurance on earnings between £12,570 and £50,270, and 2% above that.
- Employers pay 15% on employee earnings above £5,000 a year.
- Self-employed workers pay Class 4 NI at 6% on profits between £12,570 and £50,270, and 2% above.
- Class 2 contributions remain abolished, though voluntary payments are still available.
Employee UK National Insurance Rates for 2026/27 (Class 1)
Employee National Insurance is calculated against the Primary Threshold (PT), the point at which employees start paying contributions. For 2026/27, the Primary Threshold remains £12,570 a year, aligned with the income tax personal allowance.
Below the Primary Threshold, employees pay no National Insurance at all. Between the Primary Threshold and the Upper Earnings Limit (UEL), contributions are due at the main rate. Above the UEL, a lower marginal rate applies.
| Earnings band (annual) | Employee NI rate 2026/27 |
| £12,570 | 0% |
| £12,570 – £50,270 | 8% |
| Above £50,270 | 2% |
This table applies to the standard Category A National Insurance letter used by most employees. Other category letters, such as those for apprentices under 25 or employees over the state pension age, follow different rules.
Employer National Insurance Contributions 2026/27
Employers pay Class 1 secondary contributions on top of employee wages, calculated against the Secondary Threshold (ST). For 2026/27, the Secondary Threshold stays at £5,000 a year, the level it moved to for 2025/26.
Once employee earnings exceed £5,000 a year, employers pay National Insurance at 15% with no upper limit. This is a significant statutory cost, and SMEs should factor it into every payroll budget for the new fiscal year.
The Employment Allowance offers meaningful relief. For 2026/27, eligible employers can offset up to £10,500 of their employer NI liability, and the previous £100,000 total NI bill cap on eligibility has been removed. Most small and medium-sized businesses should check whether they qualify before finalising their payroll budget.
National Insurance for the Self-Employed (Class 2 & Class 4)
Class 2 National Insurance contributions were abolished from April 2024 for most self-employed individuals. Self-employed workers with profits below £12,570 can still choose to pay voluntary Class 2 contributions, currently £3.45 a week, to protect their state pension entitlement and access to contributory benefits.
Class 4 contributions remain the main National Insurance charge for the self-employed in 2026/27. The rates are:
- 6% on profits between £12,570 and £50,270
- 2% on profits above £50,270
Self-employed individuals should factor these marginal rates into their tax planning alongside income tax, since Class 4 NI is calculated and paid through the same Self Assessment process.
Key Thresholds and Limits Table
| Threshold | Weekly | Annual | Purpose |
| Lower Earnings Limit (LEL) | £129 | £6,708 | Minimum earnings to build state pension qualifying years |
| Primary Threshold (PT) | £242 | £12,570 | Employees start paying NI above this level |
| Secondary Threshold (ST) | £96 | £5,000 | Employers start paying NI above this level |
| Upper Earnings Limit (UEL) | £967 | £50,270 | Point at which the employee NI rate drops to 2% |
These figures are confirmed by GOV.UK’s official National Insurance rates and thresholds guidance, which we recommend checking directly for category letters outside the standard Category A.
How to Prepare for the 2026/27 Tax Year
Every employer has a statutory requirement to apply the correct National Insurance category and rate from the first pay run of the tax year. Getting this wrong, even briefly, means that HMRC correction work will be needed later.
A few practical steps can reduce your NI exposure and keep payroll compliant, including:
- Reviewing your Employment Allowance eligibility each year, since qualifying rules can change.
- Reassessing salary sacrifice schemes, such as pension contributions, which reduce gross pay for NI purposes and lower both employee and employer liability.
- Budgeting for the Secondary Threshold early, particularly if you’re planning to hire, since employer NI is a real cost from £5,000 of annual earnings.
- Checking director’s NI calculations, which use an annualised method rather than the standard pay-period approach.
Frequently Asked Questions
Will NI rates change in 2026?
No further changes to the main National Insurance rates were announced for the 2026/27 tax year. Employee NI stays at 8% and 2%, and employer NI stays at 15%, matching the previous fiscal year.
How is National Insurance calculated for 2026/27?
National Insurance is calculated on gross pay above the relevant threshold, using marginal rates. Employees pay 8% between the Primary Threshold and Upper Earnings Limit, then 2% above it. Employers pay 15% above the Secondary Threshold, with no upper limit.
What is the NI threshold for 2026?
The main employee threshold, the Primary Threshold, is £12,570 a year (£242 a week). The employer threshold, the Secondary Threshold, is £5,000 a year (£96 a week).
Expert Payroll and Tax Planning Support at Kirkwood Wilson
National Insurance rules affect every payroll run and every self-employed tax return, and getting the details right protects your business from HMRC penalties and unnecessary cost.
Our payroll accounting team can audit your current setup, confirm you’re on the right category letters, and check you’re claiming the full £10,500 Employment Allowance if you’re eligible. If you’re self-employed and want to plan ahead for your Class 4 liability, or you’re an employer weighing up salary sacrifice and other remuneration structures, our long-term tax planning service can help you plan efficiently for the tax year ahead.
Contact us today to book a payroll audit or a personal tax planning consultation ahead of the 2026/27 tax year.
