National Insurance Rates Guide UK (Categories A, B, C, J 2026)

NI Contribution Categories Explained

Your NI category letter is shown on your payslip and tells your employer which rates to apply. Each letter corresponds to a different combination of employee and employer rates, reflecting your circumstances. Category A is the standard rate for most employees under State Pension age — you pay 12% on earnings between the Primary Threshold and Upper Earnings Limit, and 2% above that; your employer pays 15% on earnings above the Secondary Threshold. Category B applies to married women and widows entitled to pay reduced NI (3.85% on earnings above the Primary Threshold) — this is an older category being phased out and you cannot opt into it anymore. Category C is for employees over State Pension age — you pay 0% NI, but your employer still pays the full 15%. Category H is for apprentices under 25 — you pay standard employee NI but your employer pays 0% on earnings up to the Upper Secondary Threshold (generally £50,270 for 2026/27). Category J is for employees who can defer NI (usually because they have another job where they already pay NI) — you pay 2% on all earnings above the Primary Threshold, and your employer pays 15%. Category M and Category Z are for employees under 21 — similar to H but with different age thresholds. Check your category on your payslip or ask your payroll department if you are unsure.

• A: Standard — employee 12%/2%, employer 15%
• B: Married women reduced rate — 3.85% only (being phased out)
• C: Over State Pension age — employee 0%, employer 15%
• H: Apprentice under 25 — employee 12%/2%, employer 0% up to threshold
• J: Deferring NI — employee 2%, employer 15%
• M/Z: Under 21 — employee 12%/2%, employer 0% up to threshold

Employee NI Rates 2026/27 (12% and 2%)

For the 2026/27 tax year, Class 1 employee National Insurance is charged at 12% on earnings between the Primary Threshold (£242 per week / £1,048 per month) and the Upper Earnings Limit (£967 per week / £4,189 per month). Earnings above the Upper Earnings Limit are charged at 2%. There is no NI on earnings below the Primary Threshold. For example, an employee earning £3,000 per month pays 12% on £1,952 (£3,000 − £1,048 = £1,952) = £234.24, with no 2% band if they are below the Upper Earnings Limit. Higher earners pay 12% on the band up to £4,189/month and 2% on anything above. NI is calculated per pay period (weekly or monthly) and deducted directly from your wages by your employer through PAYE. Unlike income tax, NI is not pooled across the tax year — if you earn more in one month and less in another, you may pay more NI overall than if earnings were even. Your NI contributions count towards qualifying years for the State Pension and determine eligibility for certain benefits including Jobseeker's Allowance, Employment and Support Allowance, and Maternity Allowance. See our State Pension guide for how NI years affect your pension.

Employer NI Rates (15% and Secondary Thresholds)

Employers pay Class 1 secondary NI at 15% on employee earnings above the Secondary Threshold (£175 per week / £758 per month for 2026/27). Unlike employee NI, there is no upper limit — employer NI applies to all earnings above the threshold with no cap. This means an employee earning £3,000 per month costs their employer £15,000 × 15% = .... Actually, the employer pays 15% on £2,242 (£3,000 − £758 = £2,242) = £336.30 in employer NI per month. Employer NI is a significant cost of employment and is a key consideration when hiring. Certain categories reduce or remove employer NI: Categories H, M, and Z (apprentices under 25 and employees under 21) have 0% employer NI on earnings up to the relevant upper secondary threshold (typically £50,270 per year). Employment Allowance lets eligible businesses reduce their employer NI bill by up to £5,000 per year — it is claimed through your payroll software and available to most businesses with employer NI bills under £100,000. Employer NI is listed separately on payslips and does not reduce the employee's take-home pay, but it affects the total cost of employing staff.

NI for Different Employment Types

Different types of workers have different NI rules. Directors have an annual earnings period for NI purposes, which means their NI is calculated on cumulative year-to-date earnings rather than per pay period — this can result in more favourable NI treatment for directors who are paid irregularly. Mariners (seafarers) have special NI rules that may exempt them from some contributions depending on their time spent at sea and vessel type. Armed Forces personnel pay NI under special arrangements — certain service pay elements are disregarded for NI purposes. Share fishermen pay Class 1 NI but with special rules about how earnings are assessed. Self-employed individuals pay Class 2 NI (£3.45 per week if profits exceed £12,570) and Class 4 NI (9% on profits between £12,570 and £50,270, then 2% above). Class 2 NI counts towards benefit entitlement, while Class 4 NI counts towards the State Pension. Voluntary Class 3 NI contributions (£17.45 per week) can be paid to fill gaps in your NI record. See our Self Assessment guide for how the self-employed report and pay their NI contributions.

How to Check Your NI Category on Your Payslip

Your NI category letter appears on your payslip next to your NI deductions — look for a single letter in the NI or contributions section. Common letters include A (most common), B, C, H, J, M, and Z. If you are over State Pension age, your category should be C and you should see zero NI deducted (but check your employer has updated your record). If you are under 21, your category should be M (or Z if you are a deferred-rate entrant). Apprentices under 25 should see H. If you have two jobs, you may have J on one to defer NI. If you see B and you are not a married woman with a valid reduced-rate election, contact HMRC immediately — this is likely an error. If your category seems wrong, speak to your payroll department or HR team. They can correct it in the next payroll run. Errors can mean you are paying too much or too little NI, affecting your benefit and pension entitlement. You can check your NI record and contributions online via your gov.uk personal tax account. Our State Pension guide explains how NI contributions affect your retirement income.

NI Rebates and Contracted-Out Schemes

Historically, some employees were contracted out of the Additional State Pension (State Second Pension / SERPS) through an occupational pension scheme. Contracted-out employees and employers paid reduced NI rates (a rebate) because they were building their own private pension instead. However, contracting-out was abolished on 6 April 2016 for Defined Benefit schemes and was already abolished earlier for Defined Contribution schemes. Since 2016, all employees pay the full NI rate. If you were contracted out before April 2016, your NI record may show lower contributions, which could affect your Additional State Pension entitlement. Some people received Protected Payment amounts as part of their State Pension to compensate. The old Category D and Category E letters (used for contracted-out employees) are no longer active. If you see a pension scheme deduction on your payslip, it is now a separate pension contribution, not an NI rebate. The Married Woman's Reduced Rate (Category B) still exists but is being phased out — you can only hold it if you elected before 1977. See our State Pension guide for more on how your NI history affects your pension.

FAQs

What is my NI category and how do I find it?

Your NI category letter is on your payslip in the NI or contributions section. It is a single letter (most commonly A). If you cannot find it, ask your payroll department.

Do I pay NI after State Pension age?

No — if you are over State Pension age, your category changes to C and you pay 0% employee NI. Your employer still pays 15% employer NI on your earnings.

What is the difference between Class 1, Class 2, and Class 4 NI?

Class 1 is paid by employees and employers. Class 2 is a flat weekly amount paid by the self-employed (if profits exceed £12,570). Class 4 is a percentage of self-employed profits (9% and 2%).

Can I get a refund if I have paid too much NI?

Yes — if you have overpaid due to having multiple jobs or an incorrect category, you can claim a refund from HMRC. Check your NI record via your gov.uk personal tax account.

How many NI years do I need for the full State Pension?

You need 35 qualifying years of NI contributions to receive the full new State Pension. You need at least 10 qualifying years to receive any State Pension at all.