While full-time employees have their income tax and National Insurance contributions (NI) paid through their employers (called the PAYE system), as a self-employed you have to calculate and pay them yourself.

Here is how you do it.

If you pay self-employed National Insurance through Self Assessment

Most self-employed people pay NI as part of their Self Assessment tax bill.

You need to pay 2 types of National Insurance:

For example, if you earn £60,000 from self-employment, you pay:

• £3.05 each week
• plus 9% of £40,702 (£50,270 – £9,568) = £3,663
• plus another 2% of £9,730 (£60,000 – £50,2700) = £195
• total NI contributions: £3,858.

If you don’t pay NI through Self Assessment

You don’t pay self-employed National Insurance through Self Assessment if you’re:

• living overseas
• or a non-UK resident who’s self-employed in the UK.

You can still make voluntary Class 2 National Insurance payments – for example to make sure you get the full State Pension or to cover gaps in your National Insurance record.