UK National Insurance Explained (2025/26)

National Insurance (NI) is the UK’s second payroll deduction, sitting alongside income tax on your payslip. It’s easy to overlook, but for many workers it’s a significant chunk of pay — and unlike income tax, it works on its own set of thresholds.

What employees pay (Class 1)

For the 2025/26 tax year, employees pay Class 1 NI on their earnings:

• 8% on earnings between £12,570 and £50,270 a year.
• 2% on everything above £50,270.
• Nothing on earnings below £12,570 (the primary threshold).

It’s deducted automatically through PAYE, the same way income tax is — see our full UK take-home pay guide.

What it funds

NI contributions build your entitlement to the State Pension and certain benefits. You generally need around 35 qualifying years of contributions for the full new State Pension, and at least 10 to get anything.

NI vs income tax

They’re separate systems with separate thresholds. Notably, NI is only charged on earned income (not pensions or savings), and its rate falls to 2% above £50,270, whereas income tax rises to 40% there. That’s why your marginal deduction rate jumps at that point.

Reducing your NI

A salary-sacrifice pension is the main lever: contributions come out of gross pay before NI is calculated, so you save both income tax and National Insurance on them.

See your NI

Our UK salary calculator shows National Insurance as a separate line for any salary, including the effect of pension contributions and student loans.