National Insurance

National Insurance contributions

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

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

The amount of NICs you pay depends on how much you earn. NICs 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 NICs you pay. We explain the different classes of NICs 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 NICs when you reach state pension age, even if you continue to work. The exception is class 4 NICs 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 retirement.

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

Classes of NICs

Class 1 NICs

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

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

Class 2 NICs

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

From the 2024/25 tax year onwards, class 2 NICs are 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 NICs.

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

In some cases, it is possible to pay voluntary class 2 NICs 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 NICs, and you do not receive National Insurance credits.

You can 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 NIC can be found in our page NIC for the self-employed.

Class 3 NICs

Class 3 NICs are voluntary. You can pay class 3 NICs 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 NIC or class 2 NIC, and
• you are not entitled to pay class 2 contributions voluntarily, and
• you do not receive National Insurance credits

  Class 3 NICs count towards your state pension entitlement only. They do not gain you entitlement to any other contributory state benefits. Class 3 contributions are also more expensive than voluntary class 2 contributions, so you should always consider if you are entitled to pay voluntary class 2 NICs before paying class 3 NICs.

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 NIC can be found on GOV.UK.

Class 4 NICs

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

Class 4 NIC do not count towards any state benefits.

There is detailed information in our page NIC 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 NICs 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 NICs 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 NIC.

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
• working tax credit and child tax credit
• war widow's or widower's pension
• pension credit
• universal credit

How NICs are paid

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

Class 1 NICs

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

Class 2 NIC

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

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

Class 3 NIC

If you decide to make voluntary class 3 NICs, you can pay these for the current year by quarterly bill or by monthly Direct Debit. You can also pay class 3 NIC for previous 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 NICs on our page National Insurance and the state pension.

Class 4 NIC

You pay class 4 NIC together with the income tax due on your self-employment profits through self assessment. To find out more see NIC for the self-employed.

Refunds of overpaid or incorrectly paid NICs

There is a limit to the amount of NICs you need to pay in a tax year (across different classes of contribution). If you have had only one employment, you should not have overpaid NICs. However, if your total earned income is more than the weekly upper earnings limit multiplied by 53 (£967 x 53 = £51,251 in 2024/25 and 2025/26) then it is possible that you may have overpaid NICs.

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

You might find you have overpaid NICs in certain circumstances, for example:

• you carried on working after state pension age and your employer continued to deduct class 1 NICs,
• you paid class 4 NICs 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 NICs, or
• you were employed and self-employed at the same time and paid class 1and class 4 NICs.

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

If you overpay NICs or pay NICs incorrectly, you can claim a refund.  There is a tool to help you apply for a refund of NICs on GOV.UK.

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

Read about NICs when leaving the UK on our page NIC in cross-border situations.

Checking your National Insurance record

HMRC keep a record of the NICs 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 NIC

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

More information

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