Key points
- 8% between £12,570 and £50,270, then 2% on everything above.
- On £35,000 you pay £1,794.40 a year. Your employer pays another £4,500.00 on top.
- Salary sacrifice saves NI. A 5% pension through salary sacrifice leaves you £140.00 a year better off than the same pension through net pay, on £35,000.
- It stops at State Pension age, and it is the same in Scotland as in the rest of the UK.
Work out your own
See your own National Insurance, with your category letter, pension and salary sacrifice.
Open the take-home pay calculatorThe rates for 2026/27
Employees pay Class 1 National Insurance on their pay from each job. It is worked out on each payslip, but over a year it comes to:
- Nothing on the first £12,570 a year (the primary threshold).
- 8% on pay between £12,570 and £50,270 (the upper earnings limit).
- 2% on everything above £50,270.
Unlike Income Tax, National Insurance is the same in Scotland as in the rest of the UK, and it stops when you reach State Pension age. Earning at least £6,708 a year (the lower earnings limit) still builds up qualifying years for your State Pension, even below the point where you start paying.
How much you pay
| Salary | You pay a year | A month | Your employer pays |
|---|---|---|---|
| £20,000 | £594.40 | £49.53 | £2,250.00 |
| £35,000 | £1,794.40 | £149.53 | £4,500.00 |
| £50,000 | £2,994.40 | £249.53 | £6,750.00 |
| £80,000 | £3,610.60 | £300.88 | £11,250.00 |
| £120,000 | £4,410.60 | £367.55 | £17,250.00 |
On £35,000, for example, 8% of the £22,430 above the threshold is £1,794.40 a year.
What your employer pays
Employers pay their own National Insurance on top of your salary: 15% on pay above £5,000 a year, with no upper limit. It never comes out of your pay, but it is part of what you cost to employ. For under-21s, apprentices under 25 and some veterans, employers pay nothing up to £50,270. Employers also pay 15% Class 1A National Insurance on taxable benefits such as a company car.
Category letters
The letter on your payslip sets your rate. Most people are category A. A few others change what you pay:
- B: some married women and widows pay a reduced 1.85% instead of 8%. On £35,000 that is £414.96 a year.
- C: over State Pension age, you pay nothing.
- J and Z: if you pay full National Insurance in another job, you can defer and pay 2% here: £448.60 on £35,000.
- H, M and V: apprentices under 25, under-21s and veterans pay the normal rate, but their employer pays less.
Salary sacrifice saves National Insurance
Pension contributions taken from your pay before tax save Income Tax, but only salary sacrifice saves National Insurance as well, because your salary itself goes down. On £35,000 with a 5% pension:
| 5% pension paid by | National Insurance | Take-home a year |
|---|---|---|
| No pension | £1,794.40 | £28,719.60 |
| Net pay (before tax) | £1,794.40 | £27,319.60 |
| Salary sacrifice | £1,654.40 | £27,459.60 |
The same £1,750.00 goes into your pension either way, but salary sacrifice leaves you £140.00 a year better off. Try it with your own salary.
Bottom line
National Insurance takes 8% of most of your pay, but only 2% above £50,270, so it matters most on middle incomes. Salary sacrifice is the main legal way to pay less.
Tips
- Check your category letter on your payslip. A wrong letter (for example A instead of C after State Pension age) means you pay the wrong amount.
- Earning over £6,708 but under £12,570 still gives you a qualifying year for the State Pension without paying anything.
- Ask your employer whether pension, cycle-to-work or electric car schemes run through salary sacrifice: each saves NI as well as tax.
This guide explains the rules; it is not personal financial advice.