National Insurance Explained 2026/27
Class 1 employee NI is 8% on weekly earnings from £12,570 to £50,270 annually (£242 to £967 per week) and 2% above that. Someone earning £35,000 pays roughly £1,794 NI per year.
What National Insurance is
National Insurance (NI) is a mandatory contribution that employees and employers pay on earnings. Unlike income tax, it is not just a tax: your record of contributions builds entitlement to the State Pension, Jobseeker's Allowance (JSA), Employment and Support Allowance (ESA), Maternity Allowance, and Bereavement Support Payment.
Most employees pay Class 1 NI. Self-employed people pay Class 2 and Class 4. This guide covers Class 1 rates for 2026/27.
Class 1 rates 2026/27
The two employee rates for 2026/27 are:
| Annual earnings | Weekly earnings | NI rate |
|---|---|---|
| Up to £12,570 | Up to £242/week | 0% (below Primary Threshold) |
| £12,571 to £50,270 | £243 to £967/week | 8% main rate |
| Above £50,270 | Above £967/week | 2% upper rate |
The Primary Threshold (PT) is £12,570 per year and £242 per week. Below this point no NI is charged. The Upper Earnings Limit (UEL) is £50,270 per year; above it the rate drops sharply to 2%.
How it differs from income tax
Income tax and National Insurance are separate deductions that appear on the same payslip but work independently:
- Both start at £12,570, but income tax reaches the 40% higher rate at £50,270, whereas NI drops from 8% to 2% at the same point.
- Income tax has a Personal Allowance that tapers away above £100,000; NI has no equivalent taper.
- NI is calculated per pay period, not cumulatively over the year. A large bonus in a single month can attract less NI than the same amount spread across the year.
- NI builds specific benefit entitlements; income tax does not.
Employer NI
In addition to employee NI, employers pay their own Class 1 contribution at 15% on earnings above the Secondary Threshold of £5,000 per year. This cost does not appear on your payslip but affects the total cost to employ you. Employer NI is covered separately; the figures here relate to the employee deduction only.
Worked example
At a £35,000 annual salary, the NI calculation runs as follows. Earnings between £12,570 and £35,000 (£22,430) attract 8%, giving £1,794. No earnings exceed the UEL. Total NI for the year: approximately £1,794.
Use our UK Salary Calculator to see the exact NI figure for any gross salary.
Frequently asked questions
What is the National Insurance primary threshold in 2026/27?
The primary threshold is £12,570 per year (£242 per week). Employees pay no Class 1 NI on earnings up to this point.
What does National Insurance pay for?
Class 1 NI contributions count towards the State Pension, Jobseeker's Allowance, Employment and Support Allowance, Maternity Allowance, and Bereavement Support Payment.
Is National Insurance the same as income tax?
No. Income tax and National Insurance are separate deductions with different thresholds and rates. You pay income tax above £12,570 at 20%, while NI also starts at £12,570 but at 8%. Income tax has a higher-rate threshold of £50,270; NI drops to 2% at the same point rather than rising.
Sources: HMRC National Insurance rates and thresholds 2026/27. Last updated 2026-11-04.