National Insurance for the Self-Employed — What Tradespeople Pay in 2026

When you're employed, National Insurance comes out of your wages automatically and your employer pays a chunk on top. When you're self-employed, you deal with it yourself — and it works differently.

Here's exactly what self-employed tradespeople pay and how it works.

Class 2 NI — the flat rate

Class 2 National Insurance used to be a flat weekly amount paid by all self-employed people. From April 2024, HMRC integrated Class 2 into the Self Assessment return — you no longer pay it separately.

If your profits are above the Small Profits Threshold (currently £6,725 per year), Class 2 NI is treated as paid — you get the National Insurance credits for your State Pension record automatically. If your profits are below the threshold, you can choose to pay Class 2 voluntarily to protect your State Pension entitlement.

Class 4 NI — the main charge

Class 4 NI is where the significant cost sits. It's calculated as a percentage of your profits and collected through Self Assessment.

Current Class 4 rates (2025/26): 6% on profits between £12,570 and £50,270 2% on profits above £50,270

So if your taxable profit is £35,000: Profit above the lower threshold: £35,000 - £12,570 = £22,430 Class 4 NI: £22,430 x 6% = £1,345.80

This comes out on top of your income tax bill, which is why self-employed tax bills are often higher than people expect.

Income tax on top

Class 4 NI sits on top of your income tax. Using the same £35,000 profit:

Personal allowance: £12,570 (no tax) Taxable income: £22,430 Basic rate tax at 20%: £4,486

Total bill: £4,486 (tax) + £1,346 (NI) = £5,832

On a £35,000 profit, you're paying just under £6,000 to HMRC. That's why setting aside 25-30% of everything you earn as you go is important — the bill comes in January and it's not small.

Why State Pension matters

Your State Pension entitlement is based on qualifying years of National Insurance contributions. You need 35 qualifying years for the full new State Pension (currently £221.20 per week).

As a self-employed person, you build qualifying years through your Class 2 NI (either paid explicitly when profits are below the threshold, or credited automatically above it). Missing years because you didn't earn enough and didn't pay voluntary Class 2 is a long-term cost that's easy to overlook in the short term.

If you're buying back past gaps in your NI record, this is worth doing — the cost of voluntary contributions is usually repaid quickly through higher State Pension payments.

Can you reduce your NI bill?

Class 4 NI is calculated on your profits after allowable expenses. Every legitimate expense you claim reduces your profit, which reduces both income tax and Class 4 NI. Proper record-keeping and claiming everything you're entitled to isn't just about income tax — it reduces your NI bill too.

Contributing to a pension also reduces your profits for tax purposes (through pension contributions claimed on Self Assessment). It's one of the most tax-efficient things a self-employed tradesperson can do — reducing both tax and NI while building retirement savings.

Payment on account

Like income tax, Class 4 NI is subject to the payment on account system. When you file your first Self Assessment, HMRC typically collect not just what you owe for the year but an advance payment toward next year. Make sure you're setting enough aside to cover both.

Keep it simple

Self-employed NI is complicated to explain but simple in practice. Keep records, claim your expenses, set aside roughly 25-30% of your income as you go, and file on time. The rest is your accountant's problem to calculate — which is exactly what you're paying them for.