National Insurance: The 8% and 2% on Your Payslip, and What It Earns
National Insurance (NI) is a contribution deducted from earnings that builds your entitlement to the State Pension and certain benefits. Employees pay Class 1 NI at 8% on earnings between the primary threshold of £12,570 and the upper earnings limit of £50,270 a year, and 2% on everything above; employers pay a separate 15% on earnings above £5,000.
The employee rate has fallen sharply — 12% until January 2024, 10% briefly, 8% since April 2024 — while the employer rate rose to 15% and its threshold dropped to £5,000 in April 2025. That employer charge is why salary sacrifice is so valuable: pay given up for a pension avoids both the employee's 8% and the employer's 15%, and it is why bonuses paid as cash cost an employer £1,150 for every £1,000 you receive before your own deductions.
The self-employed pay differently. Class 2 contributions (£3.50 a week) were made voluntary from April 2024, with profits above £6,845 earning a credit for free, and Class 4 is charged at 6% on profits between £12,570 and £50,270 and 2% above, through self-assessment. Voluntary Class 3 contributions, about £923 a year, buy a missing qualifying year for the State Pension.
What NI buys is the point. A year in which you pay enough — or receive credits while caring, unemployed or on Child Benefit — is a qualifying year toward the 35 needed for the full new State Pension, and it underpins contributory benefits such as new-style Jobseeker's Allowance and Employment and Support Allowance, plus Maternity Allowance. Pay nothing for a year and the gap shows on your record.
NI stops at State Pension age even if you keep working, which is why older workers take home more from the same salary. It is charged per job and per pay period rather than annually, so someone with two part-time jobs each under £12,570 can pay no NI at all while a single job on the same total would. Thresholds are frozen until April 2028, dragging more earnings into the 8% band each year.
Your NI number is the identifier HMRC and DWP use for your whole working life; your NI record on GOV.UK shows every year and every gap. Reviewing it once a decade, and filling cheap gaps before the six-year deadline for voluntary contributions passes, is one of the highest-return admin tasks in UK personal finance.
Richify separates NI from income tax on each payslip so you can see exactly what a pay rise, a salary sacrifice change or a second job does to the two deductions.
