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Class 2 and Class 4 National Insurance for the Self-Employed

If you are self-employed you may pay two kinds of National Insurance: Class 4, which is a percentage of your profits, and Class 2, which is a flat-rate contribution — though since 2024/25 the Class 2 threshold treatment changed so most self-employed people no longer pay it.

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Class 4 National Insurance

Class 4 National Insurance is paid by self-employed people on their taxable profits. For 2025/26 you pay 6% on profits between the Lower Profits Limit of £12,570 and the Upper Profits Limit of £50,270, and 2% on profits above £50,270. The rates and limits mirror the income tax personal allowance and the higher-rate threshold for convenience. Class 4 is collected through Self Assessment along with income tax — it is not deducted at source. It counts towards your State Pension and other contributory benefits, but it is not payable if your profits are at or below the Lower Profits Limit.

Class 4 NIC is 6% on profits between £12,570 and £50,270 for 2025/26.
Profits above £50,270 pay Class 4 NIC at 2%.
Class 4 is calculated on your taxable trading profits and collected through Self Assessment.
You pay no Class 4 if your profits are at or below the Lower Profits Limit of £12,570.
Class 4 contributions count towards your State Pension entitlement.

Class 2 National Insurance and the Small Profits Threshold

Class 2 National Insurance was once a flat weekly contribution, but since 2024/25 it is treated as being paid (a deemed payment) when your profits are at or above the Small Profits Threshold — £6,845 for 2025/26 — so you do not actually pay any money but still build up contribution record for benefits. If your profits are above the threshold you are treated as paying Class 2 without a bill. If your profits are below the Small Profits Threshold, you can choose to pay Class 2 voluntarily — £3.50 a week for 2025/26 — to protect your State Pension and benefits record. Class 2 is never a flat-rate bill for people above the threshold anymore.

The Small Profits Threshold for 2025/26 is £6,845, rising to £7,105 for the following tax year.
Above the threshold, Class 2 is treated as paid — you owe no weekly contribution but still build benefit entitlement.
Below the threshold you can pay Class 2 voluntarily at £3.50 a week in 2025/26.
Voluntary Class 2 protects your State Pension and contributory benefits record.
Class 2 and Class 4 are collected through Self Assessment with your income tax.

Who pays what: examples

If your taxable trading profit is £30,000 in 2025/26, you are above the Small Profits Threshold (£6,845), so your Class 2 is treated as paid at no cost. You pay Class 4 at 6% on the profits between £12,570 and £30,000 — about £1,046. If your profit is £60,000, you pay 6% on £37,700 (from £12,570 to £50,270 — about £2,262) and 2% on the £9,730 above £50,270 (about £195). If your profit is £5,000 — below both thresholds — you pay no Class 2 and no Class 4. You may still choose to pay Class 2 voluntarily to protect your benefit record. These figures ignore the trading allowance and any other income; your own numbers will depend on your exact circumstances.

At £30,000 profit: Class 2 deemed paid (no cost), Class 4 ≈ £1,046.
At £60,000 profit: Class 4 ≈ £2,262 at 6% plus £195 at 2%.
At £5,000 profit: no Class 2 or Class 4 is due, but voluntary Class 2 is available.
These examples assume no trading allowance and no other income.
Class 2 and Class 4 are calculated on your taxable trading profit, not your turnover.

See your own NIC position with KAZAALBAIDA

KAZAALBAIDA estimates your Class 2 and Class 4 National Insurance from your self-employment figures, applying the Small Profits Threshold, the Lower and Upper Profits Limits and the 6%/2% Class 4 rates for the year you choose. It also estimates your income tax and tells you whether payments on account are likely to apply. Enter your turnover, expenses and other income once, and the UK freelance simulator shows the full breakdown — income tax, Class 4, Class 2 position and payments on account — under HMRC's latest rules.

The simulator applies HMRC's Class 4 rates: 6% to £50,270, then 2%.
Class 2 is shown as deemed paid above the Small Profits Threshold.
The £1,000 trading allowance is applied when it beats your actual expenses.
The personal allowance taper above £100,000 is included in the income tax estimate.
Payments on account are flagged when your qualifying bill exceeds £1,000.

KAZAALBAIDA

Class 2 and Class 4 National Insurance for UK freelancers: the Small Profits Threshold, rates for 2025/26, and what you pay on your profits.

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