The difference between Class 2 and Class 4 National Insurance for the self-employed in 2026/27, who pays what, and how it’s collected.
Class 2
A flat weekly amount, primarily there to protect your entitlement to the State Pension and certain benefits. If your profits are below the Small Profits Threshold, you can choose to pay it voluntarily to keep your National Insurance record intact even though you’re not required to.
Class 4
Calculated as a percentage of your profits above the Lower Profits Threshold — this is the part that actually scales with how much you earn, structured with a main rate up to the Upper Profits Limit and a lower rate above it.
How it’s actually paid
Both are collected through Self Assessment, once a year, rather than deducted from pay as they would be for an employee — which is exactly why setting money aside throughout the year matters so much for the self-employed.
Work out your own Class 4 NI with the Payslp self-employed calculator.
Why Class 2 still matters even below the threshold
If your profits are below the Small Profits Threshold, you’re not required to pay Class 2 — but choosing to pay it voluntarily protects your State Pension qualifying years, which can be genuinely valuable if you’d otherwise have a gap in your National Insurance record for that year.
Frequently asked questions
Is Class 4 NI the same rate as employee National Insurance?
No — Class 4 rates are structured differently and are generally lower than the equivalent employee Class 1 rate, one of the genuine financial advantages of self-employment.
Do I pay Class 2 and Class 4 together, or is it one or the other?
Both can apply simultaneously — Class 2 protects your benefit entitlement, Class 4 is the profit-based contribution, and most self-employed people above the threshold pay both.