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Class 4 National Insurance

  • 2 min read

Class 4 National Insurance is one of the two types of National Insurance (NI) that you pay if you’re self-employed. The other type is Class 2.

How much is Class 4?

You start paying Class 4 NI once you earn over £9,880 a year from all your combined income sources until July 2022. From July 2022 onwards, in line with the 2022 Spring Statement, the threshold is increasing to £12,570 a year. It’s calculated at 10.25% of your self-employment profits between £9,880 (or £12,570 from July 2022) and £50,270, and 3.25% on anything above £50,270.

What do National Insurance classes mean?

We’re glad you asked. Take a look at the below table to see how it compares with the other classes of National Insurance:

Employment status What do I pay?
Employed and earning <£120 – but not eligible for National Insurance credits Class 3
Self-employed with profits <£6,725 Class 2 or Class 3 (depending on the benefits you want to be eligible for)
You’re employed and have a side-hustle but with low earnings and small profits Contact HMRC on 0300-200-3519
You’re a self-employed examiner, religious minister or have an investment, land or property business Class 2 or Class 3 (depending on the benefits you want to be eligible for)
You live and work abroad Class 3 – if you’ve lived in the UK for 3 consecutive years/paid 3 years of contributions
Unemployed but not claiming benefits Class 3
A married woman or widow no longer paying reduced rates Class 3
Living (but not working) abroad Class 3 – if you’ve lived in the UK for 3 consecutive years/paid 3 years of contributions

Bits to remember about Class 4 National Insurance

  • You pay it yourself through a Self Assessment tax return, as you do with Income Tax on your self-employment earnings
  • It’s paid in addition to Class 2 National Insurance, not as an alternative
  • You must pay Class 4 NI even if you earn less than the Personal Allowance
  • If you’re also working as an employee and your total earnings are over £9,880 until July 2022 (e.g. you work in sales during the day and freelance as a tutor in the evenings), you’ll pay both Class 1, Class 2, and Class 4 NI

For more information, you can use this employed and self-employed calculator to see how much NI you should pay.

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