What is Class 4 National Insurance? UK Definition 2026/27
Quick Answer
NI paid by self-employed on profits - 6% on £12,570-£50,270, 2% above.
Definition of Class 4 National Insurance
Class 4 National Insurance is paid by self-employed individuals based on their annual profits. The rate is 6% on profits between £12,570 and £50,270, then 2% on profits above £50,270. Unlike Class 2, Class 4 does not directly build State Pension entitlement - its essentially a tax on self-employment profits.
Class 4 National Insurance — Key Facts for 2026/27
| Main rate | 6% |
| Upper rate | 2% |
| Lower profits limit | £12,570 |
| Upper profits limit | £50,270 |
How Class 4 National Insurance Works — Example
- 1Self-employed profit: £60,000
- 2Band 1: (£50,270 - £12,570) x 6% = £2,262
- 3Band 2: (£60,000 - £50,270) x 2% = £194.60
- 4Total Class 4: £2,456.60
- 5Plus Class 2: £179.40 = £2,636 total NI
How Class 4 National Insurance Affects Your Tax
Class 4 NI is a significant cost for profitable self-employed individuals. Combined with income tax, the marginal rate on self-employment profits is 26% (basic) or 42% (higher). Its lower than employed rates because theres no employer NI.
Official HMRC Guidance on Class 4 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: Self-employed NI ratesFrequently Asked Questions about Class 4 National Insurance
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.