National Insurance explained
Somewhere on your payslip there is a line called NI, and next to it, probably, the letter A.
That letter is your National Insurance category. A covers most employees, and the others cover things like apprentices and under 21s, people over State Pension age and veterans. National Insurance is the second thing taken from your wages after income tax, and it is worked out separately.
The rates for employees
| Pay up to £12,570 a year | 0% |
| Pay from £12,570 to £50,270 | 8% |
| Pay above £50,270 | 2% |
These are the main employee rates, called Class 1, for 2026/27. Scotland, England, Wales and Northern Ireland all use them.
On a monthly payslip the same thresholds read £1,048 and £4,189. You pay nothing on the first £1,048 of a month's pay, 8% on the next slice, and 2% on whatever is left.
Where it behaves differently from income tax
There is no allowance that shrinks as you earn more. Pension contributions taken before tax do not reduce it, unless they go through salary sacrifice. And the rate falls once you pass £50,270. A person on £100,000 pays 2% on their extra pay, a person on £30,000 pays 8%.
Two salaries, worked through
On £40,000, you pay 8% on the £27,430 above £12,570. That is £2,194.40 a year.
On £60,000, you pay 8% on everything between £12,570 and £50,270, then 2% on the remaining £9,730. That is £3,210.60 a year.
As a monthly figure, £36,000 a year comes to £156.20 of National Insurance on each payslip.
What a pay rise really costs
Add income tax and National Insurance together and the picture changes. Between £12,570 and £50,270, each extra £1,000 you earn loses £280 to the two combined. From £50,270 up to £100,000 it loses £420. That is the number to hold in your head when you weigh up a raise.
What your contributions buy
Mostly your State Pension. You need 10 qualifying years on your record to get any new State Pension, and 35 for the full amount. A year qualifies if you paid National Insurance, if you were credited for it (while claiming certain benefits or caring for a child, for example), or if you paid voluntary contributions.
You stop paying employee National Insurance when you reach State Pension age, even if you carry on working. Your payslip letter changes to C. Your income tax carries on as before.
Uneven pay and month to month changes
Your employer checks each payslip against that period's thresholds, so a month with a bonus is measured against the monthly figures above. Over the year the total usually lands close to the tables on this page, though it can differ a little.
Earn under £12,570 and you pay none. Self employed people pay different classes of National Insurance, which this site does not cover. Your own figures are on any salary page.
Keep reading
How UK income tax worksHow a pension changes your take home payHow student loan repayments workThe £100,000 tax trapHow UK tax codes work