Class 2 National Insurance Explained
A flat-rate weekly NI contribution for self-employed people. At £3.45 per week (£179.40/year), it is one of the cheapest ways to build qualifying years for your State Pension.
What is Class 2 NI?
Class 2 National Insurance is paid by self-employed individuals. Unlike Class 1 NI (which employees pay as a percentage of earnings), Class 2 is a flat rate of £3.45 per week for 2025-26. It counts toward your qualifying years for the State Pension and entitles you to certain benefits like Maternity Allowance.
If your self-employment profits are below the Small Profits Threshold (£6,725 in 2025-26), paying Class 2 is voluntary. If your profits exceed £12,570, you also pay Class 4 NI.
How it works
Class 2 NI is calculated as part of your Self Assessment tax return. You do not pay it monthly through PAYE. The total annual amount of £179.40 is added to your tax bill at the end of the year.
If you are also employed and already paying Class 1 NI on a salary above the Primary Threshold, you may be able to apply for a deferment of Class 2 to avoid overpaying. HMRC will sort out any overpayment after you file your return.
Real example
Dan runs a small freelance design business with annual profits of £25,000. His NI bill breaks down as:
| Class | Amount |
|---|---|
| Class 2 (£3.45 x 52 weeks) | £179.40 |
| Class 4 (6% on £12,430) | £745.80 |
| Total NI | £925.20 |
The £179.40 Class 2 contribution gives Dan a full qualifying year toward his State Pension. He needs 35 qualifying years for the full new State Pension of £230.25 per week.
Who does this affect?
All self-employed individuals registered with HMRC. This includes sole traders, freelancers, and partners in business partnerships. If you earn a small amount from self-employment alongside a full-time job, you may still want to pay Class 2 voluntarily to protect your pension record, especially if your employment earnings are below the NI threshold.
HMRC source
gov.uk/self-employed-national-insurance-rates covers Class 2 and Class 4 rates, thresholds and payment methods.
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