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

If you’re self-employed as a sole trader, you may need to pay National Insurance as well as Income Tax. Whether you need to pay depends on how much profit your business makes.

This guide explains when you need to pay National Insurance, how much you might pay and when voluntary contributions could be worth considering.

 

 

What is National Insurance and do I have to pay it?

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

If you’re self-employed, the amount of National Insurance you pay depends on your annual profits. For example, for the tax year ending 5th April 2027:

  • If your profits are more than £12,570, you’ll pay Class 4 National Insurance.
  • If your profits are £7,105 or more but no more than £12,570, you won’t pay National Insurance, but you’ll still receive a National Insurance credit towards your State Pension and certain other benefits.
  • If your profits are below £7,105, you won’t pay National Insurance automatically, but you can choose to make voluntary contributions to help protect your National Insurance record.

You’ll usually work out whether you need to pay National Insurance when you complete your Self Assessment tax return.

You’ll also need a National Insurance number so HMRC can record your National Insurance contributions and credits correctly

 

Tax doesn’t need to be taxing

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How much National Insurance will I pay?

The amount of National Insurance you pay depends on your annual business profits.

For the tax year ending 5th April 2027:

  • if your profits are £12,570 or less, you won’t pay Class 4 National Insurance
  • if your profits are more than £12,570 but no more than £50,270, you’ll pay 6% on the profits above £12,570
  • if your profits are more than £50,270, you’ll pay:
    • 6% on profits between £12,570 and £50,270
    • 2% on profits above £50,270.

The examples below show how Class 4 National Insurance is calculated for different levels of annual profit.

Rakesh buys and sells things online

He has self-employed profits of £19,000 for the 2026/27 tax year. As his profits are above £12,570, he must pay Class 4 National Insurance on the profits above this threshold.

Calculation:

Annual profits:   £19,000
Less Class 4 threshold:   (£12,570)
Profits liable to Class 4 National Insurance:   £6,430
Class 4 National Insurance at 6%:   £385.80

Rakesh’s Class 4 National Insurance bill is £385.80.

Sandra is a self employed electrician

She has self-employed profits of £51,000 for the 2026/27 tax year. As her profits exceed £50,270, she pays, 6% on profits between £12,570 and £50,270 and a further 2% on profits above £50,270.

Calculation:

Profits taxed at 6%:   £37,700
Class 4 National Insurance at 6%:   £2,262.00
Profits taxed at 2%:  £730
Class 4 National Insurance at 2%:  £14.60
Total Class 4 National Insurance:  £2,276.60

Sandra’s Class 4 National Insurance bill is £2,276.60.
Rakesh buys and sells things online

He has self-employed profits of £19,000 for the 2026/27 tax year. As his profits are above £12,570, he must pay Class 4 National Insurance on the profits above this threshold.

Calculation:

Annual profits:   £19,000
Less Class 4 threshold:   (£12,570)
Profits liable to Class 4 National Insurance:   £6,430
Class 4 National Insurance at 6%:   £385.80

Rakesh’s Class 4 National Insurance bill is £385.80.

Sandra is a self employed electrician

She has self-employed profits of £51,000 for the 2026/27 tax year. As her profits exceed £50,270, she pays, 6% on profits between £12,570 and £50,270 and a further 2% on profits above £50,270.

Calculation:

Profits taxed at 6%:   £37,700
Class 4 National Insurance at 6%:   £2,262.00
Profits taxed at 2%:  £730
Class 4 National Insurance at 2%:  £14.60
Total Class 4 National Insurance:  £2,276.60

Sandra’s Class 4 National Insurance bill is £2,276.60.

How and when do I pay National Insurance?

If you need to pay National Insurance, it will be calculated automatically when you complete your Self Assessment tax return. Your Class 4 National Insurance is included in your overall Self Assessment tax bill, so you pay it at the same time as any Income Tax you owe.

The deadline for paying your Self Assessment bill is 31 January following the end of the tax year. For example, any National Insurance due for the 2026/27 tax year must be paid by 31 January 2028.

If your Self Assessment bill is above a certain amount, you may also need to make payments on account towards your next year’s tax bill. These payments are due on:

  • 31 January during the tax year
  • 31 July following the end of the tax year.

Payments on account are advance payments towards your combined Income Tax and Class 4 National Insurance liability. They are not an extra tax bill because any payments you make are deducted from your final Self Assessment bill.

 

 

Self employed tax and national insurance calculator

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Should I consider paying voluntary contributions?

If your self-employed profits are below the Small Profits Threshold, or you make a loss, you can choose to pay voluntary Class 2 National Insurance contributions. Paying voluntary contributions can help protect your entitlement to the State Pension and certain other state benefits.

For the tax year ending 5th April 2027, voluntary Class 2 contributions are £3.65 a week.

Before deciding whether to pay voluntary contributions, check your National Insurance record to see whether you have any gaps and whether making additional contributions would increase your State Pension entitlement. You can also get a State Pension forecast to see how much State Pension you’re on track to receive.

If you’re unsure whether paying voluntary contributions is right for you, consider seeking advice from a qualified tax adviser.