National Insurance classes explained

National Insurance is divided into classes set out in section 1(2) of the Social Security Contributions and Benefits Act 1992. Employees and employers pay Class 1, employers alone pay Class 1A and Class 1B, the self employed pay Class 4 and may pay Class 2, and anyone with gaps can pay voluntary Class 3. Only Classes 1, 2 and 3 build entitlement to the State Pension; Class 1A, Class 1B and Class 4 do not.

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Which classes exist and who pays them?

Section 1(2) of the 1992 Act lists the classes. The table summarises them with the rates GOV.UK gives for 2026 to 2027.

Class	Who pays	2026 to 2027	Counts for State Pension?
Class 1 primary	Employees and directors under State Pension age	8% on earnings from £12,570 to £50,270 a year, 2% above	Yes
Class 1 secondary	Employers	15% above £5,000 a year (category A)	Not for the employer
Class 1A	Employers, on taxable benefits and certain termination awards	15%	No
Class 1B	Employers with a PAYE Settlement Agreement	15%	No
Class 2	Self employed with low profits who choose to pay	£3.65 a week	Yes
Class 3	Anyone eligible who chooses to fill a gap	£18.40 a week	Yes
Class 4	Self employed with profits over £12,570	6% from £12,570 to £50,270, 2% above	No

The 2026 to 2027 Class 2 and Class 3 amounts are written into sections 11(6) and 13(1) of the 1992 Act. The Class 1 rates and thresholds come from HMRC’s rates and thresholds for employers.

How does Class 1 work for employees?

Class 1 is earnings related and is collected through PAYE. GOV.UK says the employer deducts it automatically if the employee is under State Pension age and earns more than £242 a week from one job. Each job is normally assessed separately, and the employer pays its own secondary contribution on earnings above the secondary threshold of £96 a week.

There is a band where nothing is paid but the year still counts. An employee earning from £129 to £242 a week from one job does not usually pay National Insurance but may still qualify for benefits and the State Pension, because contributions are treated as paid. Below £129 a week, the lower earnings limit, nothing is treated as paid and the employee may need credits or voluntary Class 3.

Some employees pay at other rates. A married woman or widow with a valid certificate of election pays the reduced rate under category B, which is 1.85% for 2026 to 2027. Directors use an annual earnings period instead of the pay period; see directors’ National Insurance.

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What are Class 1A and Class 1B?

GOV.UK says Class 1A and Class 1B are paid only by employers on their employees’ expenses or benefits. Class 1A is due on work benefits given to employees, and also on termination awards above £30,000; the 2026 to 2027 rate is 15%. Class 1B is paid with a PAYE Settlement Agreement, also at 15%. Neither adds anything to the employee’s contribution record. See Class 1A National Insurance and PAYE Settlement Agreements.

What do the self employed pay?

Self employed people pay Class 4 on profits above £12,570 at 6%, falling to 2% above £50,270. Class 4 is a tax on profits in effect: GOV.UK says Class 4 contributions do not count towards state benefits or pensions.

The record is protected through Class 2. Since the reforms, section 11(5B) of the 1992 Act treats a self employed person with profits at or above the small profits threshold, £7,105, as having actually paid a Class 2 contribution for each week, so they do not pay it. Someone with profits below £7,105 pays nothing but can choose to pay voluntary Class 2 at £3.65 a week. The detail is in voluntary Class 2 contributions and self employed National Insurance.

What is Class 3 for?

Class 3 is purely voluntary. Section 13(2) of the 1992 Act says it is allowed only to help the contributor meet conditions of entitlement to benefit. GOV.UK’s voluntary National Insurance guidance lists typical reasons: being close to State Pension age without enough qualifying years, having low earnings or low profits, living abroad, or not being eligible for credits. You can normally pay for the past six tax years, with a 5 April deadline each year; gaps in 2025 to 2026 can be filled until 5 April 2032.

Not everyone can pay. GOV.UK says you cannot pay voluntary contributions if you have no gaps, if you are a married woman or widow paying the reduced rate, or if the deadline has passed. From 2026 to 2027, voluntary Class 2 is not available for time abroad, and Class 3 for time abroad after 5 April 2026 requires 10 years of continuous UK residence or 10 years of qualifying contributions.

How does each class build State Pension entitlement?

GOV.UK’s table of what National Insurance is for shows that Class 1, Class 2 and Class 3 all count towards the new State Pension. They differ for other benefits:

Class 1 also counts for New Style Jobseeker’s Allowance, contribution based Employment and Support Allowance, Maternity Allowance and Bereavement Support Payment.
Class 2 counts for contribution based Employment and Support Allowance, Maternity Allowance and Bereavement Support Payment, but not New Style Jobseeker’s Allowance.
Class 3 counts for the State Pension only.

For the new State Pension you need 10 qualifying years to get anything, and 35 qualifying years for the full rate if your record started after April 2016. The full rate is £241.30 a week. People who were contracted out before 2016 usually need more than 35 years. A qualifying year can come from contributions paid, contributions treated as paid, voluntary contributions or National Insurance credits.

What are credits, and how do they fit in?

Credits fill gaps when you cannot pay, for example while claiming certain benefits, caring, or registered for Child Benefit for a child under 12. GOV.UK says there are two types: Class 1 credits, which count towards the State Pension and may help with some other benefits, and Class 3 credits, which count towards the State Pension only. Check credit eligibility before paying voluntary contributions.

Illustration: the same income under different classes

Illustration only, using 2026 to 2027 figures and category A.

An employee earning £30,000 pays (£30,000 minus £12,570) at 8%, which is £1,394.40. The employer pays (£30,000 minus £5,000) at 15%, which is £3,750. The year counts for the State Pension.
A sole trader with £30,000 of profit pays Class 4 of (£30,000 minus £12,570) at 6%, which is £1,045.80. Profits exceed £7,105, so Class 2 is treated as paid and the year counts.
A sole trader with £6,000 of profit pays nothing compulsory. Voluntary Class 2 for 52 weeks costs £189.80 and secures the year.
A person not working and without credits can pay Class 3: 52 weeks costs £956.80.

When does National Insurance stop?

GOV.UK says employees stop paying Class 1 when they reach State Pension age, and the self employed stop paying Class 4 from the 6 April after reaching State Pension age. Employers keep paying secondary Class 1 on the earnings of employees over State Pension age; HMRC’s CA44 booklet confirms the company pays at the appropriate rate. Common mistakes include assuming Class 4 builds a pension record, paying Class 3 when cheaper Class 2 is available, and paying voluntary contributions for a year already covered by credits. See also how the State Pension is taxed.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.