Employee National Insurance Rates 2026/27: 8% and 2%

For 2026 to 2027 most employees pay Class 1 National Insurance at 8% on earnings between the primary threshold of £242 a week (£1,048 a month) and the upper earnings limit of £967 a week (£4,189 a month), and 2% on everything above that. The calculation is done separately for each pay period, not cumulatively across the year, so each payday stands on its own.

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What are the employee thresholds and rates for 2026 to 2027?

HMRC publishes the figures each year in its rates and thresholds guidance for employers. For the tax year running from 6 April 2026 to 5 April 2027 they are:

Threshold	Weekly	Monthly	Yearly
Lower earnings limit (LEL)	£129	£559	£6,708
Primary threshold (PT)	£242	£1,048	£12,570
Upper earnings limit (UEL)	£967	£4,189	£50,270

For an employee on category letter A, the standard letter, the rates are:

0% on earnings from the LEL up to and including the PT;
8% on earnings above the PT up to and including the UEL;
2% on the balance above the UEL.

The 8% and 2% figures are written into section 8 of the Social Security Contributions and Benefits Act 1992, which calls them the main primary percentage and the additional primary percentage. Section 6 makes a primary contribution payable only where earnings in the period exceed the primary threshold, and only for earners over 16. Employer contributions run on a separate threshold and rate, covered in our guide to employer National Insurance at 15%.

How is employee National Insurance worked out each payday?

The law assigns every employee an earnings period, set by regulations 2 to 8 of the Social Security (Contributions) Regulations 2001. For someone paid at regular intervals, the earnings period is the pay interval. HMRC’s National Insurance Manual at NIM08002 explains that the first earnings period always starts on 6 April, so a weekly paid employee’s periods match the tax weeks and a monthly paid employee’s periods match the tax months, which run from the 6th of one month to the 5th of the next.

The thresholds are then applied to the pay in that period alone. HMRC’s further guide to PAYE and National Insurance (CWG2) sets the rules for each pattern:

Weekly, two weekly, four weekly, monthly, quarterly, half yearly and annual pay: the earnings period matches the interval, and the weekly or monthly figures are scaled to suit.
Pay intervals of less than a week: the earnings period is one week.
Irregular intervals that are not whole weeks or months: the exact percentage method must be used. The LEL is turned into a daily figure by dividing the weekly limit by 7, the other thresholds by dividing the annual figure by 365, and each is multiplied by the number of calendar days the payment covers.
Employees paid once only: the earnings period is the length of the employment or one week, whichever is longer.

Directors are the main exception. They normally have an annual earnings period, so their thresholds are applied to pay for the whole year; see directors’ National Insurance.

Exact percentage or tables?

Payroll software normally uses the exact percentage method. Under regulation 12(1) of the 2001 Regulations, employee and employer contributions are calculated separately and each result is rounded to the nearest penny, with amounts under half a penny disregarded (NIM11002). HMRC also publishes contribution tables (booklet CA38 for 2026 to 2027). The weekly tables use £1 bands and the monthly tables £4 bands, with contributions worked out on the midpoint of each band, so table results can differ slightly from the exact method (NIM11003).

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What does the lower earnings limit do if nothing is deducted?

Earnings between the LEL and the PT attract no deduction, but they still count. Section 6A of the 1992 Act treats the employee as having paid a primary contribution for that week, which keeps their record building towards the State Pension and contributory benefits. GOV.UK confirms that someone earning £129 to £242 a week from one job usually pays nothing but has contributions treated as paid. Below £129 a week there is no deduction and no credit from that job, which is where voluntary contributions or credits may come in.

HMRC’s guidance at NIM08730 adds that if earnings only occasionally reach the LEL, the earnings period still follows the actual pay interval. A weekly paid worker whose hours swing above and below the limit is tested week by week.

Why can two people on the same salary pay different amounts?

Because the calculation is not cumulative, the shape of the pay through the year can change the total. Bonuses, commission, overtime and arrears are earnings of the period in which they are paid; NIM08600 says they “lie where they fall”. If a second payment is made in the same earnings period, CWG2 requires the contributions to be recalculated on the combined total.

Illustration only. Two monthly paid category A employees each earn £27,000 in 2026 to 2027.

	Employee 1: £2,250 every month	Employee 2: £2,000 a month plus £3,000 bonus in one month
Normal month	8% x (£2,250 minus £1,048) = £96.16	8% x (£2,000 minus £1,048) = £76.16
Bonus month (£5,000)	Not applicable	8% x £3,141 = £251.28, plus 2% x £811 = £16.22, total £267.50
Total for the year	£1,153.92	£1,105.26

Employee 2 pays less because part of the bonus month sits above the monthly UEL and is charged at 2%. The effect can run the other way for lower earners: a month below the PT wastes part of the threshold that cannot be carried into a later month.

What counts as earnings for employee National Insurance?

Gross pay is the starting point, including salary, wages, overtime, bonuses and commission. Some deductions that reduce taxable pay do not reduce National Insurance pay. CWG2 paragraph 2.1 states that where pension contributions are deducted under a net pay arrangement, the employee gets tax relief only, not National Insurance relief, so the contributions are taken off gross pay for PAYE but not for National Insurance. Genuine salary sacrifice works differently, because it changes the cash pay itself; HMRC’s salary sacrifice guidance explains that tax and National Insurance then follow the cash and benefits actually provided.

Benefits in kind are normally not Class 1 earnings for the employee. The employer pays Class 1A on them instead, at the 15% rate.

Who pays a different rate?

The category letter on the payroll record decides which rates apply. For 2026 to 2027 HMRC’s table shows, among others:

B: married women and widows with a valid election pay 1.85% between the PT and UEL, then 2%.
C: employees over State Pension age pay nothing. Section 6(3) of the 1992 Act removes primary liability after pensionable age, although the employer still pays.
J: employees deferring because they have another job pay 2% across all earnings above the PT.
H, M, V, F and N: apprentices under 25, under 21s, veterans and Freeport or Investment Zone employees pay the normal 8% and 2%; these letters change only the employer’s side.

Our guide to National Insurance category letters explains how to choose the right one, and National Insurance over State Pension age covers letter C.

What happens with more than one job?

Section 6(5) of the 1992 Act makes each employment stand alone, so each employer applies the full thresholds to its own pay. Someone with two jobs can therefore pay 8% in both, or nothing in either if each wage is under the PT. Earnings from different jobs with the same employer are usually added together, and there is an annual maximum that limits the total paid across jobs. See National Insurance with more than one job and deferring National Insurance.

What mistakes come up most often?

Working out a director’s contributions purely period by period, without the annual calculation that both of HMRC’s methods for directors require.
Treating a separate bonus payment as its own period instead of recalculating on the total paid in that week or month.
Reducing National Insurance pay for net pay pension contributions.
Leaving an employee on letter A after State Pension age, or on letter M after their 21st birthday.
Assuming an employee whose annual pay is under £12,570 can never pay anything: in a non cumulative system one high paid month can still exceed the monthly PT.

For all the other payroll figures for the year, see UK tax rates and thresholds for 2026 to 2027.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.

Employee National Insurance rates for 2026 to 2027