National Insurance

National Insurance contributions

You pay National Insurance contributions (NICs) if you are:

• either employed or self-employed; and
• aged 16 or over but below state pension age.

The amount of National Insurance you pay depends on how much you earn. National Insurance contributions are only payable on income from working, not on investment income such as bank interest or dividends, pension income or rental income.

The way in which you work will affect the type (class) of National Insurance you pay. We explain the different classes of National Insurance below.

National Insurance contributions are not deductible when working out your taxable income for either the employed or self-employed. Some expenses which may be deductible for tax purposes might not be deductible for National Insurance purposes (for example, certain employment expenses).

You usually stop paying National Insurance when you reach state pension age, even if you continue to work. The exception is class 4 National Insurance for the self-employed, which you pay for the whole tax year in which you reach state pension age. You can read more about this on our page National Insurance after state pension age.

You can find out when you will reach state pension age by using the calculator on GOV.UK.

Classes of National Insurance

Class 1 National Insurance

You pay class 1 National Insurance if you are an employee and you earn above a certain amount. Your employer takes the National Insurance contributions off your wages before paying you. Your employer also pays National Insurance on your earnings.

There is detailed information about class 1 National Insurance in our page National Insurance for employees. 

Class 2 National Insurance

Class 2 National Insurance is usually relevant for people who are self-employed, in addition to class 4 National Insurance which is discussed later. 

From the 2024/25 tax year onwards, class 2 National Insurance is no longer payable by self-employed people – however, if your profits are over a certain level you will be ‘treated as having paid’ class 2 National Insurance.

Class 2 National Insurance contributions can count towards entitlement to certain contributory state benefits – as explained under the heading below: What National Insurance pays for.

In some cases, it is possible to pay voluntary class 2 National Insurance contributions to preserve entitlement to certain state benefits, in cases where your self-employed profits are not high enough that you are treated as having paid class 2 National Insurance, and you do not receive National Insurance credits. 

You can find out more about the impact of voluntary contributions on your state pension entitlement in our page National Insurance and the state pension.

Detailed information on class 2 National Insurance can be found in our page National Insurance for the self-employed.

Class 3 National Insurance

Class 3 National Insurance contributions are voluntary. You can pay class 3 National Insurance  if you want to protect your future entitlement to state pension, where: 

• you do not pay (nor are treated as having paid) either class 1 or class 2 National Insurance, and
• you are not entitled to pay class 2 National Insurance contributions voluntarily, and 
• you do not receive National Insurance credits 

You can read more about the impact of voluntary contributions on your state pension entitlement in our page National Insurance and the state pension.

More information about class 3 National Insurance contributions can be found on GOV.UK.

Class 4 National Insurance

You pay class 4 National Insurance contributions if you are self-employed and your profits are above a certain level. 

Class 4 National Insurance contributions do not count towards any state benefits.

There is detailed information in our page National Insurance for the self-employed.

National Insurance credits

If you are unable to work, or have a limited ability to work, you might be entitled to National Insurance credits. Sometimes these are given automatically, sometimes you need to claim them. 

You can read more information on our page National Insurance credits. 

What National Insurance counts towards

Some UK state benefits depend on sufficient National Insurance contributions being paid (or treated as paid, or credited) to create a qualifying year. In some cases, National Insurance credits will count towards these contributory benefits, but in other cases they will not. You can check the eligibility requirements on GOV.UK.

For more information about National Insurance qualifying years for state pension purposes, see our page National Insurance and the State Pension.

Use the following table to see which class of National Insurance contributions or credits count towards which benefit:

Note that there are exceptions to the above for share fishermen and volunteer development workers employed abroad.

Class 4 National Insurance Contributions do not count towards any state benefits.

There are other benefits for which, provided the rules for claiming apply to you, it does not matter whether you have paid any or enough National Insurance.

Benefits which do not depend on your National Insurance record include:

• attendance allowance and disability living allowance
• personal independence payment
• child benefit
• guardian's allowance
• income-related employment and support allowance
• income-based jobseeker's allowance
• industrial injuries benefits
• carer's allowance
• severe disablement allowance
• statutory payments, for example, statutory sick pay
• war widow's or widower's pension
• pension credit
• universal credit

How National Insurance is paid

The way in which National Insurance contributions are paid depend on the class of NICs, as outlined below. 

Class 1 National Insurance

You pay class 1 National Insurance contributions through your earnings under the PAYE system. Your employer deducts class 1 contributions from your gross wages before deductions, together with any income tax due, and pays you the net amount after deductions.

Class 2 National Insurance

As mentioned, from 2024/25 no payment is required, unless you are paying class 2 National Insurance contributions voluntarily. You can read more about this on our page National Insurance for the self-employed.

You can read about paying voluntary class 2 National Insurance contributions on our page National Insurance and the state pension.

Class 3 National Insurance

If you decide to make voluntary class 3 National Insurance contributions, you can pay these for the current year by quarterly bill or by monthly Direct Debit. You can also pay class 3 contributions for any of the past 6 tax years by making a lump sum payment.

There is more information on the methods of payment on GOV.UK.

You can read about paying voluntary class 3 National Insurance contributions on our page National Insurance and the state pension.

Class 4 National Insurance

You pay class 4 National Insurance together with the income tax due on your self-employment profits through as part of your annual tax return. To find out more see National Insurance for the self-employed.

Refunds of overpaid or incorrectly paid National Insurance

There is a limit to the amount of National Insurance you need to pay in a tax year (across different classes of contribution). 

HMRC do not generally reconcile each individual’s National Insurance position each year. This is because it is relatively uncommon for an individual to have paid the wrong amount of National Insurance.

However, you might find you have overpaid National Insurance in certain circumstances, for example:

• you carried on working after state pension age and your employer continued to deduct class 1 National Insurance from your earnings,
• you paid class 4 National Insurance on profits from self-employment in respect of a tax year after the one in which you reached state pension age,
• you had two or more employments on which you paid class 1 National Insurance, or
• you were employed and self-employed at the same time and paid both class 1 and class 4 National Insurance.

You can read more about National Insurance after reaching state pension age on our page National Insurance after state pension age.

If you overpay National Insurance or pay incorrectly, you might be able to claim a refund.  There is a tool to help you apply for a refund of National Insurance on GOV.UK.

You cannot claim a refund of National Insurance just because you stop work or do not work for the whole tax year.

Read about National Insurance when leaving the UK on our page National Insurance in cross-border situations.

Checking your National Insurance record

HMRC keep a record of the National Insurance contributions individuals pay (or are treated as having paid), and National Insurance credits they have received. You can check your National Insurance record by:

• logging into your personal tax account
• logging into the HMRC app
• applying online, using the form on GOV.UK
• phoning HMRC’s National Insurance enquiries helpline – you can find the details on GOV.UK
• writing to HMRC (you can find an address on GOV.UK)

Reduced rate class 1 National Insurance

If you are a woman who married before 6 April 1977 and who elected before 12 May 1977 to pay reduced rate class 1 National Insurance contributions, you can find more information on GOV.UK.

More information

HMRC’s National Insurance Manual contains more detailed information on National Insurance.