What Is Class 4 National Insurance?

If you’re self-employed in the UK, you’re responsible for paying your own National Insurance contributions (NICs). These contributions help you qualify for benefits like the State Pension. One of the NIC types you may encounter is Class 4 National Insurance.

This guide explains what Class 4 NICs are, who pays them, how much you’ll owe based on your profits, and how they relate to other self-employed NICs like Class 2.

What NICs Do the Self-Employed Pay?

As a self-employed person, you may have to pay:

• Class 2 National Insurance – a flat weekly rate

• Class 4 National Insurance – a percentage of your annual profits

From April 2024, the government has abolished Class 2 NICs for most self-employed workers, although you can still make voluntary payments to maintain certain benefit entitlements.

Class 4 NICs, however, still apply if your profits exceed a certain threshold.

What Is Class 4 National Insurance?

Class 4 National Insurance is paid by self-employed individuals on their taxable profits, not on total income. You calculate and pay it as part of your Self Assessment tax return each year.

It is separate from income tax and is charged in addition to any other personal tax liabilities you may have.

Who Needs to Pay Class 4 NICs?

You must pay Class 4 NICs if you are:

• Self-employed

• Aged 16 or over

• Earning profits above the Lower Profits Limit for the tax year

For the 2024–25 tax year, the Class 4 National Insurance rates and thresholds are:

• 9% on profits between £12,570 and £50,270

• 2% on profits above £50,270

If your profits are below £12,570, no Class 4 NICs are due.

These thresholds align with the personal income tax bands and are reviewed annually by the government.

How to Register for Class 4 National Insurance

You don’t register separately for Class 4 NICs. Once you register as self-employed with HMRC and complete a Self Assessment tax return, Class 4 contributions are calculated automatically based on your declared profits.

To register as self-employed:

1. Visit GOV.UK and sign in to your Government Gateway account

2. Register for Self Assessment and Class 4 NICs

3. Submit your annual tax return by 31 January following the end of the tax year

Payment is due by 31 January and, in some cases, a second payment on account by 31 July.

Exemptions from Class 4 NICs

You do not pay Class 4 National Insurance if:

• You are under 16 or over State Pension age during the tax year

• Your taxable profits are below the lower profits limit (£12,570 for 2024–25)

• You have a special exemption due to your employment status or profession (rare)

If you stop being self-employed part-way through a tax year, Class 4 NICs will only be calculated on the profits made during the period you were trading.

Class 4 NICs vs Class 2 NICs

Class 2 NICs were historically a flat weekly amount paid by the self-employed. From April 2024, they are no longer mandatory for most workers.

Class 4 NICs are calculated based on profit and continue to be a core contribution for self-employed individuals. They are more closely aligned with income tax in how they are charged.

If you still want to build qualifying years for the State Pension or other benefits, you can choose to make voluntary Class 2 contributions.

Final Thoughts

Class 4 National Insurance is a key part of the tax obligations for self-employed people in the UK. It's based on your annual profits and paid through your Self Assessment return.

Understanding your liability, staying on top of filing deadlines, and keeping good business records will help ensure you pay the right amount without penalties or surprises. If you’re unsure whether you need to pay, or how to plan for it, speaking to an accountant or tax adviser is a sensible step.