Class 2 and Class 4 National Insurance for sole traders in 2025/26: what you actually pay

Sole trader National Insurance changed significantly from April 2024. For 2025/26, most sole traders no longer pay mandatory Class 2, but many still pay Class 4 on profits through Self Assessment.

The short version

Class 2 is now mainly about protecting your National Insurance record. Class 4 is the main profit-based National Insurance charge for sole traders. You may get Class 2 credits without paying, but Class 4 can still be due if your profits are high enough.

Class 2 in 2025/26

If your profits are at or above the Small Profits Threshold, you generally get a qualifying year for State Pension purposes without paying Class 2. If your profits are below the threshold, you may be able to pay voluntary Class 2 contributions to protect your record.

For 2025/26, voluntary Class 2 is £3.50 per week. That can be a relatively low-cost way to fill a National Insurance gap, but you should check your record before paying.

Class 4 in 2025/26

Class 4 is charged on self-employed profits. For 2025/26, the main rate is 6% on profits between the Lower Profits Limit and Upper Profits Limit, then 2% on profits above the Upper Profits Limit. The familiar thresholds are £12,570 and £50,270.

You can estimate the charge with the Class 4 National Insurance calculator or run the whole tax stack through the self-employed tax calculator.

Worked example

If your sole trader profit is £40,000, Class 4 is charged at 6% on £27,430, which is the profit above £12,570. That gives Class 4 of £1,645.80. You do not add compulsory Class 2 on top for most sole traders under the post-2024 rules.

State Pension entitlement

National Insurance is not only about this year's tax bill. Your record affects State Pension entitlement and some benefits. If you have low profits, career breaks, maternity periods, or gaps from earlier years, check your record on GOV.UK before deciding whether voluntary contributions are worth paying.

Class 2 vs Class 4

Class 2 is weekly and now mainly voluntary or credited for many sole traders.
Class 4 is profit-based and paid through Self Assessment.
Class 2 can protect qualifying years for State Pension.
Class 4 does not by itself buy extra State Pension years.

Official sources

GOV.UK explains self-employed NI rates here: Self-employed National Insurance rates. You can check your NI record here: Check your National Insurance record.