What is Class 4 National Insurance?
A profit-based NI contribution paid by self-employed people — 6% on profits between £12,570 and £50,270.
Key Facts
- ✓ 6% on profits between £12,570 and £50,270
- ✓ 2% on profits above £50,270
- ✓ Does not count towards state pension entitlement
- ✓ Paid through Self Assessment
- ✓ Applies to annual trading profits
- ✓ Maximum contribution caps if also employed
Current Rates (2025/26)
- ▸ Lower rate: 6% (£12,570-£50,270)
- ▸ Upper rate: 2% (above £50,270)
- ▸ Lower Profits Limit: £12,570
- ▸ Upper Profits Limit: £50,270
Explanation
Class 4 National Insurance is a profit-based contribution paid by self-employed people on their annual trading profits. For 2025/26, the rates are 6% on profits between £12,570 (the Lower Profits Limit) and £50,270 (the Upper Profits Limit), and 2% on any profits above £50,270. Unlike Class 2 NI, Class 4 contributions do not count towards your state pension or benefit entitlement — they are purely a tax. Class 4 NI is calculated and paid as part of your annual Self Assessment tax return. If you are both employed and self-employed, you pay Class 1 NI on your employment income and Class 4 NI on your self-employment profits, though there are maximum contribution caps to prevent double-charging. The Lower Profits Limit for Class 4 is aligned with the Personal Allowance for income tax, simplifying the calculation.
Try the calculator: Use our free calculator to see how class 4 national insurance affects your finances.
Self-Employed Tax Calculator →Other Glossary Terms
The system HMRC uses to collect income tax and National Insurance directly from employees' wages.
National InsuranceA UK tax on earnings and self-employed profits that funds the state pension, NHS, and benefits.
Personal AllowanceThe amount of income you can earn each year before paying income tax — currently £12,570.
Basic Rate (20%)The 20% income tax rate applied to taxable income between £12,571 and £50,270.
Higher Rate (40%)The 40% income tax rate applied to taxable income between £50,271 and £125,140.
Additional Rate (45%)The 45% income tax rate applied to taxable income above £125,140.