Key takeaways
- National Insurance is 8% of your pay between £12,570 and £50,270 a year, then 2% above — and nothing on the first £12,570.
- NI as a share of salary rises to 6.0% at £50,270 and then falls — to 3.8% at £110,000 — because only 2% applies above the limit.
- National Insurance is worked out per pay period, not cumulatively — each month against the monthly thresholds, each week against the weekly ones.
- You generally need 35 qualifying years for the full new State Pension and at least 10 to get anything at all — gaps in your record are cheap to fix early and expensive to discover at 66.
National Insurance is 8% of your pay between £12,570 and £50,270 a year, then 2% above — and nothing on the first £12,570. It is the second-biggest deduction on most payslips, and the least understood.
Ask most people what National Insurance is and you will get one of two answers: it is a tax, or it is insurance. Both are half right. It is collected like a tax, through payroll, on your earnings — but it is not income tax, it is not worked out the same way, and it buys you something income tax does not: a record that decides what benefits and pension you can claim. This article explains the rates, works out what they cost at seven salaries, and says plainly what the money is for.
The rates, in one table
Employee National Insurance — Class 1, the kind most employed people pay — has two rates and two thresholds. Nothing is charged on the first £12,570 a year. Between £12,570 and £50,270 you pay 8%. Above £50,270 you pay 2%.
| Threshold | Per year | Per month | Per week |
|---|---|---|---|
| Primary threshold — NI starts here | £12,570 | £1,048 | £242 |
| Upper earnings limit — rate drops to 2% | £50,270 | £4,189 | £967 |
| Main rate (threshold to limit) | 8% | 8% | 8% |
| Additional rate (above the limit) | 2% | 2% | 2% |
There is also a lower earnings limit of £129 a week. Earn between £129 and £242 a week and you pay no NI, but the week still counts towards your NI record — which matters for your State Pension, as we will see below.
Your employer pays a separate charge: 15% of your pay above £5,000 a year (£417 a month, £96 a week), less the £10,500 Employment Allowance where the employer can claim it. Employer NI has no upper limit — it keeps charging at 15% on the whole salary above £5,000, unlike yours, which drops to 2%.
What it costs at seven salaries
These figures are employee NI only, with no pension (pension does not reduce NI) and tax code 1257L.
| Salary | NI / year | NI / month | Income tax / year | NI as % of salary |
|---|---|---|---|---|
| £20,000 | £594.40 | £49.53 | £1,486.00 | 3.0% |
| £35,000 | £1,794.40 | £149.53 | £4,486.00 | 5.1% |
| £50,000 | £2,994.40 | £249.53 | £7,486.00 | 6.0% |
| £50,270 | £3,016.00 | £251.33 | £7,540.00 | 6.0% |
| £60,000 | £3,210.60 | £267.55 | £11,432.00 | 5.4% |
| £80,000 | £3,610.60 | £300.88 | £19,432.00 | 4.5% |
| £110,000 | £4,210.60 | £350.88 | £33,432.00 | 3.8% |
Look at the last column. NI as a share of salary rises to 6.0% at £50,270 and then falls — to 3.8% at £110,000. That is because the 8% rate stops at the limit and only 2% applies above it. Income tax does the opposite: it keeps growing as a share of salary all the way up. The two deductions cross over in character at exactly £50,270. Below it, NI is the bigger marginal deduction after tax; above it, NI almost stops mattering, and tax does all the work. A £110,000 salary pays £33,432.00 of income tax and only £4,210.60 of NI.
The same pattern explains why a pay rise above £50,270 keeps so much more than a rise below it. A £2,000 rise at £50,000 costs £56.20 of extra NI; the same rise at £35,000 costs £160.00. The rise is worth £127.75 a month at £50,000 and £113.33 at £35,000, even though the higher earner pays more tax.
Per period, not cumulative
Here is the detail that catches people out. Income tax is cumulative: PAYE looks at your whole year so far. National Insurance is not. It is worked out per pay period — each month against the monthly thresholds (£1,048 and £4,189), each week against the weekly ones (£242 and £967). A month in which you earn £5,000 pays NI of £267.50: 8% of the £3,141 between £1,048 and £4,189 (£251.28) plus 2% of the £811 above £4,189 (£16.22). A week in which you earn £1,000 pays £58.66: 8% of the £725 between £242 and £967 (£58.00) plus 2% of the £33 above £967 (£0.66).
Because of this, an irregular month — a bonus month, say — can cost more or less NI than the annual figure suggests, and the difference is not corrected later in the year the way tax is. The annual figure is still the right way to think about your NI bill over a year, but the monthly figure is what actually leaves your bank each month.
What it pays for
National Insurance funds the State Pension and contributory benefits: Jobseeker's Allowance, Employment and Support Allowance, Maternity Allowance and Bereavement Support Payment, among others. It is not a pot with your name on it. Today's contributions pay today's benefits and pensions, and your own entitlement comes from your NI record — the count of qualifying years you have built up.
That record is the most important thing NI buys you. You generally need 35 qualifying years for the full new State Pension and at least 10 to get anything at all. A qualifying year is a year in which you paid enough NI, or were credited with it — through employment, self-employment, or credits for caring, illness or unemployment. You can check your record and your State Pension forecast on GOV.UK, and you can buy back missing years voluntarily. If there is one practical action in this article, it is that check: gaps in your record are cheap to fix early and expensive to discover at 66.
One more thing NI does not do: it does not pay for the NHS. That is a persistent myth. The NHS is funded from general taxation. A small slice of NI — the NHS allocation — is notionally assigned to health spending, but the NHS does not depend on your NI contributions, and paying more NI does not buy you more healthcare.
What NI does not touch
Three things escape NI that income tax catches. Pension contributions do not reduce it: your pension comes off before tax but not before NI, which is why salary sacrifice — which reduces your gross pay first — is the only way to save NI on pension money. Savings, dividends and rental income are not charged NI at all. And once you pass State Pension age, you stop paying employee NI entirely, even if you keep working — though your employer keeps paying theirs.
Work out your NI
Enter your pay in the National Insurance calculator to see your NI per week, month and year — and what your employer pays on top. For the other half of your payslip, read Income tax bands 2026/27, explained with worked examples — and the 2026/27 rates behind every figure on this page.
Questions
How much National Insurance do I pay on £35,000?
£1,794.40 a year — £149.53 a month. That is 8% of the £22,430 of your pay between the £12,570 primary threshold and the £50,270 upper earnings limit. Your employer pays another £4,500.00 on top.
What are the National Insurance rates for 2026/27?
Employees pay 8% on earnings between £12,570 and £50,270 a year, then 2% above £50,270. There is no NI on the first £12,570. Employers pay 15% on pay above £5,000 a year, less the £10,500 Employment Allowance where eligible.
Why does my NI rate drop above £50,270?
Above the upper earnings limit the employee rate falls from 8% to 2%. That is the design of the system: NI is capped in a way income tax is not, so a pay rise above £50,270 keeps much more of each extra pound than a rise below it.
Work out your NI at any salary
NI as a share of salary rises to 6.0% at £50,270 and then falls — enter your pay in the National Insurance calculator to see your NI per week, month and year.
Figures are for tax year 2026/27, tax code 1257L, England, Wales or Northern Ireland, no pension. Rates: GOV.UK — last checked 5 November 2026. This site is not affiliated with HMRC or GOV.UK. Figures are estimates for guidance, not financial advice.