What this estimator works out
This estimator calculates employee National Insurance from annual earnings, using thresholds and rates you can edit. It returns an annual figure and a monthly estimate.
Every threshold and rate is an editable field rather than a fixed value. National Insurance changes more often than most deductions, and a tool with the figures hard-coded goes quietly wrong. Rates, bands and thresholds change, usually every April. Every one is an editable field on this page, with a recent value supplied as a starting point. Check the current figure on GOV.UK before relying on a result.
Enter your details
Before you calculate
- Confirm your National Insurance class. This estimator covers Class 1, paid by employees. The self-employed pay Class 4 through Self Assessment at different rates.
- Use gross annual earnings, before tax and before any pension contribution that is not salary sacrifice.
- Check the current thresholds and rates on GOV.UK. The defaults here reflect a recent tax year and will not stay current.
- Remember National Insurance stops being payable once you reach State Pension age, even if you keep working.
National Insurance charges its main rate only on earnings between the primary threshold and the upper earnings limit. Above that, the rate drops sharply. This is the opposite shape to income tax, and it is why the combined marginal rate actually falls at the point where higher rate tax begins.
How this calculator works
Two bands, applied to gross earnings:
Band 1 = earnings between the primary threshold and the upper limit
Band 2 = earnings above the upper limit
NI = (band 1 × main rate) + (band 2 × upper rate)In practice National Insurance is assessed on each pay period rather than annually, so a month with a bonus attracts more than a twelfth of the annual figure and cannot be reclaimed the way over-deducted income tax can. The annual figure here is the right one for planning; a single payslip may differ.
This covers the employee contribution only. Employers pay a separate secondary contribution on top, which does not appear on your payslip but is part of the cost of employing you.
Worked example: £35,000 a year
Using the default figures — £35,000 of earnings, a £12,570 primary threshold, a £50,270 upper limit, an 8% main rate and 2% above:
- Earnings in the main band: £35,000 − £12,570 = £22,430
- Earnings above the upper limit: none
- National Insurance: £22,430 × 8% = £1,794.40 a year
- Monthly estimate: £149.53
Try £60,000 to see the shape of the system. The main band contributes £3,016 and the £9,730 above the upper limit adds only £195 — so someone earning £60,000 pays about £3,211, less than double what a £35,000 earner pays despite earning nearly twice as much.
Common mistakes
- Using last year's thresholds. They are reviewed most years, which is why they are editable here.
- Applying employee rates to self-employed earnings. Class 4 is a different calculation entirely.
- Expecting the monthly figure to match a payslip exactly. NI is assessed per pay period, not annually.
- Assuming NI works like income tax. Different thresholds, different shape, and no cumulative annual reconciliation.
- Continuing to expect deductions after State Pension age. Employee contributions stop at that point.
Frequently asked questions
What does National Insurance actually pay for?
It contributes to the State Pension, contributory benefits and, historically, the NHS. For individuals the practical significance is the qualifying years it builds towards the State Pension — you generally need 10 qualifying years to receive anything and around 35 for the full new State Pension.
How do I check my National Insurance record?
Through your personal tax account on GOV.UK, which shows your contribution history, any gaps and a State Pension forecast. It is worth checking, because gaps can sometimes be filled by voluntary contributions, though whether that is good value depends on your circumstances.
Do I pay National Insurance on a pension?
No. Pension income is not subject to National Insurance, and employees stop paying it once they reach State Pension age even if they continue working. Income tax still applies to pension income.
What about a second job?
Each employment applies the thresholds separately, which can mean paying less overall than someone earning the same total in one job. HMRC may apply a different arrangement in some cases. If you have two jobs and are unsure, your personal tax account or HMRC directly is the place to check.
Does salary sacrifice reduce National Insurance?
Yes, for both you and your employer, because the sacrificed amount is not treated as earnings. This is a large part of why salary sacrifice pension arrangements are more efficient than ordinary contributions.
Related tools
References
- GOV.UK — current National Insurance rates, thresholds, classes and qualifying years
- HM Revenue & Customs — your personal tax account and National Insurance record
Sources are checked at publication and can change — how I choose and check references.