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Deadlines and penalties
Class 4 National Insurance for a sole trader: what a client pays on £50,000 and £60,000 profit, worked
GOV.UK sets Class 4 at 6% over £12,570 and 2% over £50,270 for 2026 to 2027. Worked on £50,000 and £60,000 of profit, with the Class 2 position.
A sole-trader client sends over a profit figure and asks the plain question: "what National Insurance will that be?" The answer is a short sum, but clients often assume the headline percentage applies to the whole profit, or that the rate keeps climbing. It does neither.
What GOV.UK says
The GOV.UK page on self-employed National Insurance rates, as I read it for the 2026 to 2027 tax year, gives these figures:
- Class 4: 6% on profits over £12,570 up to £50,270.
- Class 4: 2% on profits over £50,270.
- Profits of £7,105 or more: Class 2 is treated as paid, so the client does not pay it.
- Profits below £7,105: nothing has to be paid, but the client can choose to pay voluntary Class 2 at £3.65 a week.
The page does not use the names "lower profits limit" or "upper profits limit"; those are my labels for £12,570 and £50,270.
The sum
Class 4 applies only to the slice of profit inside each band. Nothing is charged on the first £12,570.
| Profit | Working | Class 4 |
|---|---|---|
| £12,570 | nothing above the threshold | £0.00 |
| £30,000 | (£30,000 - £12,570) x 6% = £17,430 x 6% | £1,045.80 |
| £50,000 | (£50,000 - £12,570) x 6% = £37,430 x 6% | £2,245.80 |
| £60,000 | £37,700 x 6% + (£60,000 - £50,270) x 2% = £2,262.00 + £9,730 x 2% = £2,262.00 + £194.60 | £2,456.60 |
The £37,700 is £50,270 less £12,570. Between £50,000 and £60,000 of profit the bill rises by £210.80, which is 2.11% of the extra £10,000. A client who thinks they will lose 6% of every extra pound is overestimating, and one who thinks the rate drops to 2% on the whole profit is underestimating.
The Class 2 position
At profits below £7,105 the client owes nothing, but a voluntary payment can protect their record. Over a full year of 52 weeks that is £3.65 x 52 = £189.80. I assumed 52 weeks for the sum; the page gives the weekly rate only. Whether a particular client should pay voluntarily depends on their existing National Insurance record, which I did not check.
What to do with the figure
- Quote Class 4 as a separate line from income tax so the client can see both. Income tax is not part of this sum.
- Check what else the profit triggers. Profit near £60,000 also brings in other thresholds: see the High Income Child Benefit Charge.
- Check the profit figure itself. The choice of expenses or allowance changes Class 4: see trading allowance or expenses.
- If the bill is more than the client can find, see a client who cannot pay the Self Assessment bill.
What I did not read
I did not read the Class 4 rules for partners, for people over State Pension age, for those with more than one trade or an employment alongside, or how Class 4 is collected through Self Assessment. I did not check the rates against any announcement after the page I read on 19 October 2026, and the rates differ in other tax years.
Overlyft builds AI staff who join your practice team and take each sole trader's profit figure, work out Class 4 from the dated bands and show the sum line by line for the accountant to confirm before it goes to the client.
This is general information, not legal or financial advice. Check the GOV.UK pages for your client's case.
Where this comes from: GOV.UK, "Self-employed National Insurance rates" (tax year 2026 to 2027: Class 4 at 6% on profits over £12,570 up to £50,270 and 2% above £50,270; profits of £7,105 or more, Class 2 treated as paid; below £7,105 no payment required but voluntary Class 2 at £3.65 a week). Read 19 October 2026.
AEO Lookup editorial team
We write practical guides for people who run small UK firms, and we check every fact against its source on the date shown. Read how we review, or tell us if something has changed.
