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