Key takeaways
- Self-employed NI is on profits, not turnover — invoice total minus expenses.
- Class 2 is a flat weekly rate; Class 4 is a percentage of profits.
- Both are collected through Self Assessment — no separate bill.
- Paying Class 2 protects your State Pension and contributory benefits.
- If profits are below the small profits threshold, Class 2 is optional but voluntary.
What self-employed National Insurance is
National Insurance (NI) is the contribution the self-employed make towards the State Pension and certain benefits. Unlike PAYE employees who have NI deducted from each payslip, the self-employed pay NI on their annual profits — your turnover (total invoiced and received) minus your allowable business expenses — through their Self Assessment tax return.
There are two classes of NI for the self-employed: Class 2 and Class 4. Both are calculated by HMRC and collected through Self Assessment, so you do not get a separate NI bill — it all comes as one tax bill.
Class 2: the flat rate
Class 2 NI is a flat weekly amount (approximately £3.45 per week for 2024-25). It is charged when your annual self-employed profits are above the small profits threshold (approximately £6,715 for 2024-25). If your profits are below this threshold, Class 2 is not automatically charged — but you can choose to pay it voluntarily to protect your State Pension entitlement.
Class 2 is the contribution that gives you a qualifying year towards the State Pension. You need 35 qualifying years for the full new State Pension and 10 qualifying years for any State Pension at all.
Class 4: the percentage
Class 4 NI is a percentage of your profits above a threshold. For 2024-25:
- 9% on profits between £12,570 and £50,270.
- 2% on profits above £50,270.
If your profits are below £12,570, you pay no Class 4. If your profits are above £50,270, you pay 9% up to that figure and 2% above it. The rates and thresholds are reviewed each year in the Budget.
How much will I pay?
A self-employed person with profits of £25,000 would pay approximately:
- Class 2: £3.45 × 52 = £179.40
- Class 4: 9% of (£25,000 - £12,570) = 9% of £12,430 = £1,118.70
- Total NI: approximately £1,298
This is on top of Income Tax, which is charged on profits above the Personal Allowance (£12,570 for 2024-25). Both NI and Income Tax are paid through the single Self Assessment bill.
Voluntary Class 2 contributions
If your profits are below the small profits threshold and Class 2 is not automatically charged, you can choose to pay it voluntarily. This costs approximately £179 a year and gives you a qualifying year towards the State Pension. For most low-profit self-employed people, this is worth doing — each qualifying year adds about £328 a year to your State Pension for life, so the payback is fast.
Records and Self Assessment
HMRC calculates your NI from the profits you declare on your Self Assessment return. Your profits are your total invoiced income minus your allowable business expenses — so keeping good invoice and expense records is what makes the NI figure correct. If you do not declare all your income, your NI contributions will be wrong and your State Pension entitlement could be affected.
Invoice with your NI in mind
Build invoices that track your income accurately — your profits are what your NI is calculated on. Free, no sign-up.
Frequently asked questions
How much National Insurance do self-employed people pay?
Two classes: Class 2 is a flat weekly rate (about £3.45/week for 2024-25) if your profits are above the small profits threshold. Class 4 is 9% of profits between £12,570 and £50,270, plus 2% above £50,270.
Do I pay NI on each invoice?
No. Self-employed NI is on your annual profits (turnover minus expenses), not on each invoice. It is calculated and collected through your Self Assessment tax return.
What is the small profits threshold?
Approximately £6,715 for 2024-25. If your profits are below this, Class 2 is not automatically charged, but you can pay it voluntarily to protect your State Pension.
Why should I pay voluntary Class 2?
Each qualifying year of Class 2 adds about £328 a year to your State Pension for life. At about £179 a year, the payback is very fast.
How are NI and Income Tax different for the self-employed?
NI funds the State Pension and certain benefits; Income Tax funds general government. Both are charged on self-employed profits and both are paid through the single Self Assessment bill.
Free invoice tools
General guidance only — not legal, tax or accounting advice. Rules and rates can change; check HMRC's current guidance for the latest. Last reviewed 8 October 2026.