National Insurance for a sole trader in 2026 to 2027: Class 2 and Class 4 worked at five profit levels

A sole trader's National Insurance is two things. Class 4 is a percentage of profit, paid through Self Assessment. Class 2 is a flat weekly figure that for most people is no longer a bill at all. The sums are small enough to do on the back of a quote.

The rates for 2026 to 2027

GOV.UK gives these figures for the tax year:

• Class 4: 6% on profits over £12,570 up to £50,270, and 2% on profits over £50,270.
• Class 2: £3.65 a week.
• Small profits threshold: £7,105.

GOV.UK says Class 2 contributions are treated as paid, to protect your National Insurance record, once your profits reach £7,105. So above that line you pay nothing for Class 2 and still get the credit. Below it, you can pay Class 2 voluntarily to keep the record going.

Class 4 at five profit levels

Profit means your taxable profit after expenses, not what you invoiced.

At £60,000 the first £37,700 above £12,570 pays 6%, which is £2,262.00, and the £9,730 above £50,270 pays 2%, which is £194.60. The total is £2,456.60.

Income Tax is separate and comes on top. Above £50,270 the National Insurance rate falls from 6% to 2%, so the extra £9,730 adds only £194.60.

Class 2 in practice

If your profit is £7,105 or more, you are credited with the weekly contributions and pay nothing. If it is below that, paying voluntarily for the whole year costs 52 × £3.65 = £189.80. Whether that is worth it depends on your existing record, so check it with HMRC before you pay.

Class 4 on the return

Class 4 is calculated on your Self Assessment return from the same profit figure as your Income Tax, so no separate form is needed. It is due with the tax on 31 January after the year ends and, if you pay on account, in the same instalments.

What a tradesperson should do with this

1. Work out profit before you work out the bill. Our day rate calculator shows what a day has to earn once costs are covered.
2. Set money aside for both. At £30,000 profit, Class 4 of £1,045.80 comes on top of the Income Tax. Put a share of every invoice aside, which is easier than finding the lump on the deadline.
3. If you are close to £50,270, remember the rate drops, but the £50,000 turnover test for Making Tax Digital looks at income before expenses. See who is in Making Tax Digital.
4. Allow for the bill when it lands. The 31 January guide shows how a CIS deduction offsets the tax bill.

Overlyft can set up an AI assistant that takes your monthly takings and costs, keeps a running profit figure and tells you how much to put aside for tax and National Insurance, for you to check with your accountant.

This is general information, not tax advice. If you also have an employer job or a company, ask your accountant how the classes combine.