National insurance for the self-employed: Class 2 and 4

Ask five sole traders how national insurance works and you'll get five different answers. Some think they don't pay it. Some think they pay it twice. Both are wrong, and the real rules are short.

Here's how national insurance for the self-employed works in the UK, using the 2026 to 2027 rates from GOV.UK, checked on 4 November 2026.

What is national insurance for the self-employed?

National insurance is a tax on your work income. It also builds your record for benefits like the State Pension. If you're employed, your boss deducts it from your pay. If you're self-employed, you work it out and pay it yourself.

Self-employed people can pay two kinds: Class 2 and Class 4. They work differently, so it helps to treat them as two separate things.

What is Class 4?

Class 4 is the one that costs money. GOV.UK says that for 2026 to 2027 you pay:

• 6% on profits between £12,570 and £50,270
• 2% on profits over £50,270

Profit means your income minus allowable costs. If your profit is under £12,570, you pay no Class 4.

Say you're a cleaner with a profit of £30,000. The first £12,570 is free of Class 4. The remaining £17,430 is charged at 6%. That's £1,045.80 of Class 4 for the year. This is an example, not tax advice, and Class 4 is separate from income tax. I go through the income tax side in how much tax you pay on £30,000 self-employed.

What is Class 2?

Class 2 used to be a flat weekly bill. For most people now, it's closer to a free credit.

GOV.UK says that if your profits are £7,105 or more a year, you don't have to pay Class 2. It's treated as paid, so the year still counts on your National Insurance record.

If your profits are under £7,105, you don't have to pay anything. You can choose to make voluntary Class 2 payments. The rate is £3.65 a week for 2026 to 2027.

So the quick version:

1. Profit under £7,105: nothing to pay, but you can pay Class 2 voluntarily.
2. Profit £7,105 to £12,570: no payment, and the year still counts.
3. Profit over £12,570: Class 4 on the part above that line.

Why would anyone pay Class 2 voluntarily?

Because of the State Pension. GOV.UK says you need 10 qualifying years on your National Insurance record to get any new State Pension. Its "what you'll get" page says the full amount is £241.30 a week, and you need 35 qualifying years for it if your record started after April 2016. People contracted out before 2016 usually need more than 35. That page doesn't say which tax year the £241.30 applies to, so check the current figure before you plan around it.

Now picture a dog walker who earns a profit of £5,000 in a quiet first year. That's under £7,105, so the year might not count by default. Paying Class 2 at £3.65 a week could keep the record going. Whether that's worth it depends on your other years. Check your State Pension forecast on GOV.UK first. Don't pay voluntarily without looking.

How do you pay it?

GOV.UK says most self-employed people pay Class 2 and Class 4 through Self Assessment. You file your return, and the bill is part of your total.

That means national insurance isn't a separate payment you remember in March. It lands in the same bill as your income tax. If you're over the threshold for payments on account, it can be split across two instalments, so the bill can feel larger than you expected.

One exception. GOV.UK says examiners, moderators, invigilators and exam question setters can't pay Class 4 through Self Assessment. They need to contact HMRC.

You also need a UTR to file. If you haven't got one, here's what a UTR number is and how to get it.

Do you pay national insurance twice?

Only if you're both employed and self-employed. Say you've got a day job and a side business. Your employer deducts national insurance from your wages. Class 4 on the side business is charged on its own profit. The two are separate calculations, so you're not paying twice on the same pound.

What should you do now?

Keep it simple:

1. Work out your profit for the year, not your income.
2. Check which band you fall in: under £7,105, up to £12,570, or above.
3. Set aside money for Class 4 as you earn. I wrote about how in how to save for tax as a self-employed person.
4. If your profit is low, check your State Pension forecast before deciding on voluntary Class 2.

My take: national insurance is the least scary bill a sole trader gets. The rules are a few lines long. The painful part isn't the rate, it's finding out in January how much you owe.

At Vcents, we help you get paid by your customers quickly, through your own WhatsApp chat. Fast payments make it easier to keep money aside for a bill like this.

Sources

• GOV.UK: Self-employed National Insurance rates, checked 4 November 2026
• GOV.UK: National Insurance, how much you pay, checked 4 November 2026
• GOV.UK: New State Pension, what you need to do, checked 4 November 2026
• GOV.UK: New State Pension, what you'll get, checked 4 November 2026