Tax and NI
Class 4 National Insurance calculator
The National Insurance a sole trader actually pays, charged on profit through Self Assessment and nowhere else.
On £40,000 of trading profit in 2026/27, Class 4 National Insurance is £1,646: 6 % of the profit between the lower profits limit of £12,570 and the upper profits limit of £50,270, and 2 % of anything above that. Profit up to £12,570 pays nothing. The charge applies to self-employed profit only, after allowable expenses, so wages from a job, rental income, pensions and dividends never enter it. It is worked out on your Self Assessment return and paid with Income Tax by 31 January, including through payments on account. The rates and limits are the same in England, Scotland, Wales and Northern Ireland. Class 4 does not itself build your State Pension record: that role belongs to Class 2, which since the 2024/25 tax year is treated as paid, at no cost, when profit reaches £7,105. Type a profit below to see both.
Class 4 National Insurance, 2026/27
Class 4 to pay
£1,646
| 6.0 % band | £1,646 |
| 2.0 % above £50,270 | £0 |
| Class 2 | treated as paid |
Figures checked by Radif Partners · Editorial policy · How we calculate
Two rates, two limits
For 2026/27 the lower profits limit is £12,570 and the upper profits limit is £50,270 (HMRC, National Insurance rates and allowances). Profit up to the lower limit is free of Class 4. Between the limits, every pound pays 6 %. Above the upper limit, the rate drops to 2 % and there is no ceiling. The structure is set by section 15 of the Social Security Contributions and Benefits Act 1992 (legislation.gov.uk).
| Profit | At 6 % | At 2 % | Class 4 | Share of profit |
|---|---|---|---|---|
| £12,000 | £0 | £0 | £0 | 0 % |
| £20,000 | £446 | £0 | £446 | 2.2 % |
| £35,000 | £1,346 | £0 | £1,346 | 3.8 % |
| £50,270 | £2,262 | £0 | £2,262 | 4.5 % |
| £75,000 | £2,262 | £495 | £2,757 | 3.7 % |
| £120,000 | £2,262 | £1,395 | £3,657 | 3 % |
Because the rate falls above £50,270, Class 4 is regressive at the top: someone on £120,000 pays a smaller share of profit than someone on £50,270. It is the opposite of Income Tax, and it explains why the combined marginal rate in England jumps from 26 % to 42 % at the same point, rather than doubling.
What profit means here
Class 4 uses the same taxable profit as Income Tax: turnover less allowable expenses and capital allowances. Pension contributions, the Personal Allowance and Gift Aid lower Income Tax but do nothing to Class 4. A self-employed electrician who pays £5,000 into a personal pension gets relief against Income Tax, while Class 4 is still charged on the full profit. An allowable expense, by contrast, cuts both.
Class 4 set against Class 1
Employees pay Class 1 at 8 % between £12,570 and £50,270 and 2 % above, and their employer adds 15 % on pay above £5,000 (HMRC, rates for employers). The self-employed rate is lower and there is no employer share, which is one reason the same work often costs less in contributions when done on a self-employed basis.
| Annual figure | Class 4 (on profit) | Employee Class 1 | Employer Class 1 |
|---|---|---|---|
| £20,000 | £446 | £594 | £2,250 |
| £40,000 | £1,646 | £2,194 | £5,250 |
| £70,000 | £2,657 | £3,411 | £9,750 |
The comparison works both ways when someone has a job and a business: each class is worked out on its own income. The job plus self-employment page runs the full bill for that case.
How and when it is paid
There is no separate Class 4 return. You enter profit on your Self Assessment return, HMRC calculates Class 4 alongside Income Tax, and both are paid together by 31 January after the tax year ends (GOV.UK, self-employed National Insurance rates). Class 4 counts towards the bill used for payments on account, so in the first year January carries half of it again as an advance.
Examiners, moderators, invigilators and people who set exam questions pay a separate Special Class 4 and cannot pay it through Self Assessment; they arrange it with the National Insurance office. Ministers of religion with no salary or stipend pay none.
Your National Insurance record
Class 4 earns no benefit entitlement of its own. Your record for the State Pension depends on Class 2, which is treated as paid when profit is £7,105 or more: anyone liable to Class 4 is already past that point. The Class 2 guide covers years with lower profits.