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Class 4 National Insurance

  • 2 min read

Class 4 National Insurance is a tax you pay when you’re self-employed. It’s one of many types (classes) of national insurance (NI).

Pre-6th April 2024, there was a second type of national insurance paid by the self-employed. Class 2 national insurance. But it’s been scrapped by Jeremy Hunt.

You can now pay class 2 voluntarily if you earn less than the £12,570 threshold for class 4 – and you want to qualify for benefits or fill gaps in your NI record.

How much is Class 4?

You start paying class 4 NI at a rate of 6% from 6 April 2024 once you earn over £12,570 a year from all your combined income sources.

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 < £123 – 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)
Self-employed with profits > £6,725 Class 2 (scrapped from 6 April 2024)
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
  • If you’re also working as an employee and your total earnings are over £12,570, you’ll pay both Class 1 and Class 4 NI

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