What is Class 1 National Insurance? UK Definition 2026/27
Quick Answer
NI paid by employees (8%/2%) and employers (15%) on employment earnings.
Definition of Class 1 National Insurance
Class 1 National Insurance is paid on employment earnings. Employee contributions are 8% on earnings between £12,570 and £50,270, then 2% above. Employers pay 15% on all earnings above £5,000. Class 1 NI builds entitlement to State Pension and contributory benefits like JSA and ESA.
Class 1 National Insurance — Key Facts for 2026/27
| Employee rate | 8% / 2% |
| Employer rate | 15% |
| Primary threshold | £12,570/year |
| Secondary threshold | £5,000/year |
How Class 1 National Insurance Works — Example
- 1Employee NI: (£50,000 - £12,570) x 8% = £2,994
- 2Employer NI: (£50,000 - £5,000) x 15% = £6,750
- 3Total NI: £9,744
- 4Employer cost of employment: £56,750
How Class 1 National Insurance Affects Your Tax
Class 1 NI is a significant cost for both employees and employers. Its in addition to income tax, making the true marginal rate on employment income 28% or 42% (including employee NI only).
Official HMRC Guidance on Class 1 National Insurance
For official guidance, refer to HMRC's documentation. Tax rules can change, so always verify current rates and thresholds on gov.uk.
HMRC: National InsuranceFrequently Asked Questions about Class 1 National Insurance
Related Tax Terms
Accuracy Note
This information is for guidance only and is based on 2026/27 tax year rates. Tax rules are complex and your circumstances may differ. For personal advice, consult a qualified accountant or tax adviser.