How Much Is Self-Employed National Insurance in 2024/25?

Nobody enjoys seeing deductions come out of their hard-earned cash, but paying National Insurance is one of the necessary evils of self-employment. The amount that you pay towards NI depends on how much you earn, and even how you earn it, such as through an employer or as someone who works for themselves.

Why do I need to pay National Insurance?

Making National Insurance Contributions, or NICs, counts towards your eligibility for some types of state benefits, and towards your state pension. If you don’t make the full amount of contribution each year, you might not be able to receive the full amount of state pension when you reach retirement age.

Do I need to pay National Insurance if I’m self-employed?

There are different types of National Insurance (NI), known as classes. These classes tell us who is making the contribution, what rate they must pay, and on what type of income. The type of National Insurance you pay on your self-employed profits is different to the NI contributions you make through an employer.

 

Types of self-employed NI

There are currently two types of National Insurance for self-employed people, although this will change from April 2024 onwards.

  • Class 2: Payable as a flat weekly amount, this type of National Insurance will be abolished from April 2024
  • Class 4: Worked out as a percentage of the profits you make from self-employment

How much National Insurance will I pay if I’m self-employed?

National Insurance is a bit different for self-employed people because rather than paying it on your income, you pay it on your profits. As a self-employed sole trader, your profits are what’s left after you deduct business expenses from the money you make on sales. It’s an important point, because otherwise you’d end up paying tax and NI on money you didn’t actually get to keep!

 

How much can I earn from self-employment before starting to pay NI?

You’ll only pay National Insurance once your self-employed profits reach the NI threshold. The thresholds are the same for both the 6th April 2023 – 5th April 2024 tax year, and the 2024/25 tax year (6th April 2024 – 5th April 2025).
 

Annual Threshold
  • No NI to pay
  • Can make voluntary contributions
£0 – £6,724
Small Profits Threshold(SPT)
 

  • No NI to pay
  • Will build up National Insurance credits
£6,725
Lower Profits Threshold (LPT)
 
The point at which you start paying Class 2 NI on profits. This type of NI will be abolished in April 2024.

  • 2023/24: Pay Class 2 NI at a rate of £3.45 per week
  • 2024/25: Class 2 NI abolished
£12,570
Lower Profits Limit (LPL)
 
Start paying Class 4 NI on your profits at a rate of:

  • 2023/24: 9%
  • 2024/25: 6%
£12,570
Upper Profits Limit (UPL)
 
Pay Class 4 NI at a rate of:

  • 2023/24: 2%
  • 2024/25: 2%
£50,270

What happens to my National Insurance if I work for myself and for an employer?

Unlike tax, which is based on your total profits for the year, National Insurance is paid depending on how you earn the money.

In short, how much you earn from your employer might affect which rate of income tax you pay on your self-employed earnings, but it won’t impact your National Insurance. Employed NI and self-employed NI are separate!
 
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Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible.


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