Class 1 NI rates, 2026-27 thresholds, and how NI differs from income tax on your payslip.
National Insurance is a separate tax from income tax. It funds the NHS, State Pension, and other benefits. As an employee you pay Class 1 contributions automatically through PAYE alongside income tax.
| Earnings | Rate |
|---|---|
| Up to 12,570 | 0% |
| 12,571 to 50,270 | 8% |
| Over 50,270 | 2% |
Income tax and NI are calculated separately with different thresholds and rates. NI does not apply to pension income, investment income, or rental income. The NI rate drops to 2% above 50,270, unlike income tax which keeps increasing.
Your employer also pays NI at 15% on your salary above 5,000 per year. For someone earning 40,000 that is an extra 5,250 on top of your salary. This is one reason salary sacrifice pension contributions benefit both employees and employers.
Your NI contributions count towards your State Pension entitlement (you need 35 qualifying years for the full new State Pension), Statutory Maternity, Paternity, and Sick Pay, Jobseekers Allowance, and NHS services.
Do I pay NI if I earn under 12,570?
No. Below the Primary Threshold of 12,570 you pay no employee National Insurance.
Do Scottish residents pay different NI?
No. National Insurance is the same across the whole of the UK. Only income tax differs in Scotland.
Free, accurate, 2026-27 rates. Scotland and tax code supported.