income tax return in the hands of a self-employed worker

What is Class 4 National Insurance?

Class 4 National Insurance is for self-employed people with annual profits over £12,570.

But to really understand Class 4 National Insurance, it’s worth learning about the other National Insurance classes, and who pays them.

Class 4 National Insurance is for self employed people with profits over £9,569

What is Class 2 & 4 National Insurance?

If you’re self-employed, you must pay Class 4 National Insurance based on earnings thresholds.

If your profits are £6,845 or more a year:

Class 2 contributions are treated as having been paid to protect your National Insurance record.

If your profits are more than £12,570 a year, you must pay Class 4 contributions.

For tax year 2025 to 2026 you’ll pay:

  • 2% on profits over £50,270
  • 6% on profits over £12,570 up to £50,270

Can I Pay Class 2 National Insurance?

If your profits are £6,845 or more a year

Class 2 contributions are treated as having been paid to protect your National Insurance record. This means you do not have to pay Class 2 contributions.

  • If you’re aged 16 or under, or you’re over the State Retirement Age, then you don’t have to pay.
  • You’re also exempt if you’re a married woman who opted into the Reduced Rate scheme before 1977.
  • Certain roles are exempt from National Insurance Contributions, or they’re subject to different rules. For more information, take a look at the government’s online guidance.

You can elect to pay Class 2 National Insurance. At the time of writing, Class 2 contributions for FY25/26 are £3.50 a week.

If you’re exempt from National Insurance contributions, you can still make voluntary contributions. Head here for a guide to voluntary National Insurance contributions.

What is Class 4 National Insurance and Do I Need to Pay
For It?

You need to make Class 4 National Insurance Contributions if your annual profits exceed £9,501 a year. 

You pay Class 4 National Insurance Contributions in the same way as you’d pay Class 2 National Insurance Contributions – either through Self-Assessment, or as a voluntary payment. The big difference is how much you’ll pay. Whereas Class 2 Contributions are charged at a basic rate each year, Class 4 Contributions are charged as a percentage of your profits. 

The rate changes with each tax year. At the time of writing, the rate for Class 4 Contributions FY 25/26 are 6% on profits between £12,570 and £50,270, and 2% on profits over £50,270.

How to Pay Class 4 National Insurance Contributions

The majority of self-employed people pay their Class 4 National Insurance Contributions through self-assessment. When you submit your tax return, if your profits go over the threshold, then HMRC will automatically work out how much National Insurance you’ll have to pay.

They’ll add it to your overall tax bill, so you can pay it at the same time as you pay the rest of your tax.

You can join the self-assessment scheme when you register as self-employed. Read our guide to registering as self-employed.

Who is exempt from Class 4 National Insurance?

But certain types of self-employed people don’t pay National Insurance through self-assessment. These include:

  • People involved in exams, such as moderators and invigilators.
  • Anyone who runs a business that involves land or property.
  • Religious ministers who don’t receive salaries or stipends.
  • Investors who don’t make investments as a business, and who therefore do not get fees or commissions.

We also have a guide to Class 2 National Insurance contributions for self-employed people.

Your Needs as a Self-Employed Freelancer or Contractor

So long as you take all the necessary steps to register your business, and so long as you keep good records, you shouldn’t have any problems with National Insurance Contributions.

But even so, it’s a good idea to get insurance as a self-employed freelancer or contractor. This can provide an essential safety net for many of the problems that self-employed workers face, from unpaid invoices to tax disputes.

We offer specialist insurance policies for freelancers and contractors. Our tailored insurance policies cost as little as 35p a day, and they’ll cover you for many of the additional risks that freelancers and contractors face.

If you have any questions or would like to discuss your options please contact our Tapoly team at info@tapoly.com, call our helpline on +44(0)2078 460 108 or try our chat on our website.

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