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Class 2 National Insurance is one of two types of National Insurance (NI) that you pay if you’re self-employed. You pay National Insurance so that you’re entitled to certain state provided benefits such as the state pension.
The second type that you pay is Class 4. With both, the type that you pay is determined by how much you earn. You start paying Class 2 NI once you earn over £6,725 a year from self-employment.
You pay a fixed amount calculated at £3.15 per week. That works out as a flat £164 per year.
Unlike Income Tax, you have to pay National Insurance even if you earn less than the tax-free Personal Allowance. If you’ve not heard of it, it’s the first £12,570 that you earn. This is usually the case. However, following the 2022 Spring Statement, the NI thresholds for Class 1 and Class 4 contributions are increasing to match the Personal Allowance at £12,570. This change will take place in July 2022, which means that you won’t need to pay any NI for Class 1 and 4 for earnings less than £12,570.
| NI class | Who pays? | How? | How much is it? |
| Class 1 | Employees earning more than £189 per week who are under State Pension age a year | Your employer deducts it through PAYE | 13.25% (or 3.25% if you earn over £262 a week) |
| Class 1A or 1B | Employers for employees earning over £189 per week | Your employer pays it on top of your Class 1 | 15.05% |
| Class 2 | Self-employed people earning over £6,725 a year | Through a Self Assessment tax return | Flat £164 per year |
| Class 3 | Voluntary contributions – you can pay them to fill gaps in your NI record | Through a Direct Debit | £15.85 per week |
| Class 4 | Self-employed people earning over £9,880 a year | Through a Self Assessment tax return | 10.25% (or 3.25% if you earn over £50,270) |
Click to use our National Insurance calculator. We’ll calculate what you owe based on what you earned and your expenses.
You pay this tax via a Self Assessment tax return, the same way that you do with Income Tax. Here are few other things to bear in mind about National Insurance:
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