Self-employed individuals are usually required to pay Class 4 National Insurance contributions (NICs) if their annual profits exceed £12,570. For the 2024-25 tax year, Class 4 NIC rates are set at 6% (down from 9% in 2023-24) on profits between £12,570 and £50,270, with an additional 2% charged on profits above £50,270.
Certain groups are exempt from paying Class 4 NICs, including:
The Class 4 NIC rate is lower than the corresponding rate for employees, who pay 8% on the same income levels. Both employees and the self-employed contribute 2% on income above the higher rate threshold.
The majority of individuals pay Class 4 National Insurance via self-assessment.
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Self-employed individuals are usually required to pay Class 4 National Insurance contributions (NICs) if their annual
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