How National Insurance Works in 2026/27 (and Why It's Per Pay Period)

National Insurance (NI) is the UK’s second big tax on earnings. It builds your entitlement to the State Pension and some benefits. It works differently from Income Tax in one crucial way: for employees, it’s worked out separately for every pay period.

Employee NI rates for 2026/27

For most employees (category letter A):

Earnings per month	Earnings per week	Rate
Up to £1,048	Up to £242	0%
£1,048.01 – £4,189	£242.01 – £967	8%
Above £4,189	Above £967	2%

The annual equivalents are £12,570 (the Primary Threshold) and £50,270 (the Upper Earnings Limit). These match the Income Tax Personal Allowance and higher-rate threshold for England, Wales and Northern Ireland.

Employer NI

Your employer pays 15% on your earnings above the Secondary Threshold of £5,000 a year (£417 a month), with no upper limit. You don’t see it on your payslip, but it’s part of what you cost to employ. Our take-home pay calculator shows it under the period table. Smaller employers can claim the Employment Allowance to offset some of it.

Why NI is per pay period

Income Tax is cumulative. Payroll looks at your pay for the whole tax year so far. NI isn’t: each payday stands alone, with that period’s thresholds. That has real effects:

• Weekly vs monthly pay. On a £30,000 salary, monthly pay gives £1,393.92 of NI a year and weekly pay £1,393.08, because the thresholds round differently.
• Bonuses. A bonus paid in one month mostly falls above the monthly Upper Earnings Limit, so it’s charged at 2%, not 8%. A £10,000 bonus on a £30,000 salary means total NI of £1,695.26 for the year, less than if the same £40,000 were spread evenly (£2,193.96).
• Irregular hours. A month below £1,048 pays no NI at all, even if your annual earnings are higher.

NI category letters

Your payslip shows a category letter. The common ones are:

• A: most employees
• C: over State Pension age, no employee NI
• H: apprentices under 25 (no employer NI below the Upper Secondary Threshold)
• M: under 21 (no employer NI below the Upper Secondary Threshold)
• J: you already pay NI through another job and can defer
• Z: under 21 deferring NI

When you stop paying NI

Employees stop paying NI once they reach State Pension age, even if they keep working. Employers still pay their 15%. In the take-home calculator, switch on Over State Pension age (no NI).

Self-employed NI

The self-employed pay Class 4 NI on profits: 6% between £12,570 and £50,270 and 2% above, worked out annually through Self Assessment. Class 2 is no longer compulsory. If your profits are at least £7,105 you get NI credits automatically, and below that you can pay voluntarily at £3.65 a week. See the self-employed tax calculator.

What NI pays for

Each year you pay NI (or get credits) counts as a qualifying year towards your State Pension. You need 35 qualifying years for the full new State Pension and at least 10 to get any. You can check your record and fill gaps with voluntary contributions through your personal tax account.

Salary sacrifice and NI

Salary sacrifice reduces the pay NI is charged on, so you and your employer both save. From April 2029, pension sacrifice above £2,000 a year will attract NI. See our salary sacrifice guide.