Employee National Insurance 2026/27

Employee National Insurance is Class 1 primary contributions deducted from an employee’s pay through PAYE. For 2026/27 the rate is 8% on earnings between the primary threshold (£12,570) and the upper earnings limit (£50,270), then 2% on earnings above the upper earnings limit. Both thresholds are frozen and align with the income tax personal allowance and basic-rate threshold respectively. This calculator works out exactly how much employee NI you pay on a given salary and shows the breakdown across the two rate bands.

How employee NI works in 2026/27

The structure is two flat rates either side of the upper earnings limit:

The lower earnings limit (£6,708 a year for 2026/27) is a separate concept. You don’t pay NI between the lower earnings limit and the primary threshold, but if your earnings sit in this band you are treated as having paid NI for state pension and contributory benefit purposes. This is why a director taking a £6,708 salary still earns a qualifying year for the state pension without actually paying anything.

Worked example: £35,000 salary

A £35,000 salary in 2026/27:

• First £12,570: below the primary threshold, no NI.
• Next £22,430 (£35,000 − £12,570): in the 8% band. NI = £22,430 Ã, 8% = £1,794.

Total annual employee NI: £1,794. Monthly NI deducted: £149.50.

A £75,000 salary:

• First £12,570: 0%, no NI.
• £12,570 to £50,270 (£37,700): 8% = £3,016.
• £50,270 to £75,000 (£24,730): 2% = £495.

Total annual employee NI: £3,511. Monthly NI deducted: £292.58.

Notice that crossing the upper earnings limit slows the NI rate dramatically — from 8p in the pound to 2p in the pound. This is the opposite of income tax, which speeds up at the same point (20% to 40%). The combined marginal rate for an employee just below the upper earnings limit is 28% (20% income tax + 8% NI). Just above the upper earnings limit, it’s 42% (40% income tax + 2% NI). The 14-percentage-point jump is what makes the £50,270 threshold the most expensive boundary in the system.

NI categories: A, B, M, H, V, F and what they mean

Most employees are in NI category A (standard adult employee). Other categories apply for specific situations:

• B: Married women and widows with the reduced rate election (very few people are still on this; the option closed in 1977).
• C: State pension age and over — no employee NI is payable.
• H: Apprentices under 25 — employer NI is reduced to 0% up to the upper secondary threshold; employee NI is the same as category A.
• M: Under 21 — employer NI is reduced; employee NI is the same as category A.
• V: Veterans (first 12 months of civilian employment) — employer NI is reduced.
• F, I, S, L: Freeport and Investment Zone employees — employer NI is reduced.

For the employee, only category C (state pension age) and category B (vanishingly rare) change the employee NI calculation. Everyone else pays the standard 8% and 2% rates.

Second jobs and NI

NI is calculated separately for each employment. If you have a £40,000 main job and a £10,000 second job, your main job pays NI as if it’s the only job (8% above £12,570 = £2,194), and the second job pays no NI (it’s below the primary threshold for that employment). Compare to income tax, where your second job is typically all taxed at basic rate via a BR code because the personal allowance is already used. This means second jobs are often much better for NI than they are for income tax.

You can apply for NI deferment if your combined earnings across two or more employments are likely to exceed the upper earnings limit, to ensure you don’t overpay across the year.

State pension and qualifying years

NI contributions translate into qualifying years for the state pension. Each tax year in which you earn above the lower earnings limit (£6,708 for 2026/27) and below the primary threshold gets you a qualifying year credit even though no NI is paid. Each tax year in which you earn above the primary threshold and pay NI gets you a full qualifying year. You currently need 35 qualifying years for the full new state pension and 10 minimum for any state pension.

Key takeaways

• Employee NI for 2026/27: 8% between £12,570 and £50,270, then 2% above.
• The primary threshold (£12,570) and upper earnings limit (£50,270) are frozen, aligning with income tax thresholds.
• Crossing the upper earnings limit slows your NI rate but speeds your income tax rate, producing a 14 percentage point combined marginal rate jump at £50,270.
• Earnings between £6,708 and £12,570 generate a qualifying year for the state pension without paying NI.
• Most employees are NI category A; only category C (state pension age) changes the employee calculation.

Frequently asked questions

Is employee NI the same as income tax? No. They are separate calculations with different thresholds and different rates. The personal allowance and primary threshold both happen to be £12,570 for 2026/27, but they behave differently — income tax above £50,270 jumps to 40%, while NI above £50,270 drops to 2%. The combined effect on each pound of pay is what drives marginal rate maths.

Do I pay NI on bonuses? Yes, at the prevailing rate for that pay period. A bonus that pushes a single month’s pay above the upper earnings limit will see most of the bonus taxed at 2% NI rather than 8%, even if your annual earnings would put you firmly in the 8% band on average. The cumulative tax code adjusts income tax across the year, but NI is settled per pay period and is not reconciled annually.

Do I get a refund if I overpay NI? NI is settled per pay period for most cases. If you have multiple employments and exceed the annual maximum, HMRC adjusts after the year-end. You can apply for deferment if you expect to exceed the annual maximum across multiple jobs.

Do I keep paying NI after state pension age? No. Once you reach state pension age (currently 66, rising), employee NI stops. You stay on PAYE for income tax but the NI line goes to zero. Notify your employer with the appropriate documentation so they apply the correct NI category C.