How employee National Insurance is worked out in 2026/27
Published · 5 min read · Figures checked . UK rules and rates change, so check the official sources below before you act.
National Insurance is taken from most employees' pay alongside income tax. This guide explains the 2026/27 Class 1 thresholds and rates, how each payslip figure is calculated, and what the contributions build towards.
What Class 1 National Insurance is
National Insurance is a separate charge from income tax. It is paid by workers and employers, and the contributions build entitlement to certain benefits and the State Pension. Employees pay Class 1 contributions, which are taken from their pay by their employer before it reaches them. According to GOV.UK, you pay mandatory National Insurance if you are 16 or over and are an employee earning more than £242 a week from one job. Employees stop paying Class 1 contributions when they reach State Pension age. This guide covers the 2026/27 tax year, which runs from 6 April 2026 to 5 April 2027, and it applies across England, Scotland, Wales and Northern Ireland, because National Insurance is set UK-wide.
The thresholds and rates in detail
Several named thresholds sit behind the figures. The lower earnings limit is £129 a week (£559 a month, £6,708 a year). The primary threshold, the point above which employees start to pay, is £242 a week (£1,048 a month, £12,570 a year). The upper earnings limit, where the rate drops, is £967 a week (£4,189 a month, £50,270 a year). Employees with the most common category letter, A, pay 0% between the lower earnings limit and the primary threshold, 8% between the primary threshold and the upper earnings limit, and 2% on everything above it. Each rate applies only to the slice of pay that falls inside its band, in the same way income tax bands work.
The category letter on your payslip or tax records changes the rates. For example, letter B, for some married women and widows with a valid certificate of election, pays 1.85% in the middle band, while letter J, for people who have deferred payment because they have more than one job, pays 2% in the middle band. Apprentices under 25 (letter H) and employees under 21 (letter M) pay the same employee rates as letter A, and their employers pay no National Insurance on pay up to £967 a week. Employers otherwise pay 15% on pay above their secondary threshold of £96 a week (£417 a month), which does not come out of the employee's pay.
Why pay periods matter
The bands are published as weekly and monthly figures, and the National Insurance due is worked out for each pay period using the matching band, rather than once on the year's total. The GOV.UK example shows a category A employee paid £1,000 in a week: nothing on the first £242, 8% on the £725 between £242 and £967, which is £58.00, and 2% on the remaining £33, which is £0.66, giving £58.66 for the week. Because the monthly threshold of £1,048 is a rounded-up figure (twelve months of it is £12,576, slightly above the £12,570 annual figure), a monthly-paid employee's annual total can differ by a few pence from an annual calculation.
A worked example
The figures here are illustrative only and are not typical or recommended amounts. For example, suppose a category A employee is paid £3,000 in a month. The part above the monthly primary threshold is £3,000 minus £1,048, which is £1,952. At 8%, that is £156.16 of employee National Insurance for the month, or £1,873.92 over twelve identical months. Now suppose a different month in which the same employee receives £5,000 including a bonus. The middle band runs from £1,048 to £4,189, a width of £3,141, and 8% of that is £251.28. The remaining £811 above £4,189 is charged at 2%, which is £16.22. The month's total is £267.50. Income tax on the same pay would be calculated separately.
Pay below the primary threshold does not always mean nothing is recorded. Taking £1,000 in a month, which is above the £559 monthly lower earnings limit but below £1,048, an employee pays nothing, and the month still counts towards their record. GOV.UK says that employees earning from £129 to £242 a week from one job usually do not pay, but may still qualify for certain benefits and the State Pension, because contributions are treated as paid.
What the contributions count towards
GOV.UK lists Class 1 contributions as counting towards the basic and new State Pension, new style Jobseeker's Allowance, contribution-based Employment and Support Allowance, Maternity Allowance and Bereavement Support Payment. For the new State Pension, GOV.UK says a person needs 10 qualifying years on their National Insurance record to get any amount, and 35 qualifying years to get the full rate, which is £241.30 a week according to the page read for this guide. A year can qualify through National Insurance paid while working, through National Insurance credits, for example when unemployed, ill, or caring, or through voluntary contributions. People who contracted out of the additional State Pension before April 2016 may need more than 35 years.
Common mistakes and points to check
- Mixing up National Insurance and income tax: they have different thresholds, rates and rules, even though both appear on a payslip.
- Assuming Scottish income tax rates change National Insurance: they do not, as National Insurance is UK-wide.
- Forgetting that employees with self-employed work as well may owe Class 4 National Insurance on profits, which HMRC confirms after a Self Assessment return.
- Not checking the category letter: the wrong letter can mean the wrong rate.
- Treating the figures as permanent: thresholds and rates are set for each tax year.
Where to get free help
If a payslip looks wrong, many people start by asking their employer or payroll team how the National Insurance figure was calculated. HMRC can check your National Insurance record and category letter, and Citizens Advice and MoneyHelper offer free, impartial guidance. This guide is general information, not personal advice.
Check before you act
Rates and thresholds change, so it can be worth confirming the figures on the official pages linked below before relying on any calculation.
Sources
For information only. See our disclaimer and editorial standards. Spotted an error? Tell us.
