How much National Insurance will I pay as a sole trader?

National Insurance is a system of contributions paid to qualify for certain benefits including the State Pension.

As a sole trader you will pay Class 4 National Insurance if you’re:

• 16 or over
• self-employed and making a profit of £12,570 or more a year (for 2024/25)

A sole trader may sometimes pay Class 2 National Insurance:

• these contributions are treated as having been paid if you earn more than £6,725
• if profits are less than £6,725 a year, you can choose to pay Class 2 contributions

You need a National Insurance number before you can start paying National Insurance contributions. 

Both Class 2 and Class 4 National Insurance Contributions are calculated as part of the self-assessment process. Many self-employed individuals are under what is known as the payments on account regime. 

You may choose to make voluntary Class 3 National Insurance contributions if, for example, you have gaps in your National Insurance record. Voluntary contributions will give you credit for that payment period towards certain state entitlements such as a credit towards the new flat-rate state pension.

The Class 3 contribution rates are a lot higher than Class 2 at £17.45 per week.

If you want to review your national insurance credits to date, you can contact HM Revenue and Customs (HMRC). 

It is important to be aware of the number of ‘credit years’ to be eligible for the full amount of state pension:

• 30 years if you reach State Pension age on or after 6 April 2010 but before 6 April 2016, or
• 35 years if you reach State Pension age on or after 6 April 2016
• this is men born on or after April 6th 1951 and women born on or after April 6th 1953

Before making a decision on paying voluntary contributions we recommend you speak to an experienced professional for more advice.

You can check the details of your National Insurance record here.