UK National Insurance Changes 2026/27 Explained
The 2026/27 UK tax year (running from 6 April 2026 to 5 April 2027) brings another round of National Insurance (NI) changes that affect employees, employers, and the self-employed. While the headline rates haven't moved much since the big shake-up of April 2025, several thresholds, allowances, and rules have shifted — and because personal tax thresholds remain frozen, millions of people will still feel the difference in their take-home pay. This guide breaks down everything you need to know about National Insurance for 2026/27, in plain English.
Quick Summary: What's New for 2026/27
| Item | 2026/27 Figure |
|---|---|
| Employee Class 1 NI rate | 8% (on earnings between the Primary Threshold and Upper Earnings Limit), 2% above |
| Employer Class 1 NI rate | 15% (on earnings above the Secondary Threshold) |
| Employer Secondary Threshold | £5,000 per year (frozen) |
| Employee Primary Threshold | £12,570 per year (frozen) |
| Upper Earnings Limit | £50,270 per year (frozen) |
| Lower Earnings Limit (LEL) | £6,708 per year (£559 per month) — increased |
| Self-employed Class 4 NI | 6% on profits £12,570–£50,270, 2% above |
| Employment Allowance | £10,500 (unchanged, no £100,000 eligibility cap) |
| Personal Allowance (Income Tax) | £12,570 (frozen, threshold freeze extended to April 2031) |
1. Employee National Insurance Rates for 2026/27
If you're an employee, your National Insurance is deducted automatically through PAYE. For 2026/27, the structure stays the same as the previous year:
- 0% on earnings up to £12,570 (the Primary Threshold)
- 8% on earnings between £12,570 and £50,270
- 2% on earnings above £50,270
Because these thresholds are frozen rather than rising with inflation or wage growth, anyone who gets a pay rise this year will end up paying NI (and income tax) on a larger slice of their income than before. This effect is commonly known as fiscal drag, and it's one of the biggest quiet tax rises in the UK system right now.
2. Employer National Insurance: Still the Big Story
The most significant and lasting change to hit UK payrolls came in April 2025, when employer NI rose from 13.8% to 15% and the Secondary Threshold — the point at which employers start paying NI on an employee's earnings — was slashed from £9,100 to just £5,000 a year.
For 2026/27, both of these settings remain exactly where they were:
- Employer NI rate: 15% on earnings above the Secondary Threshold
- Secondary Threshold: £5,000 per year, frozen until at least 2030/31
In practice, this means the full-year cost of the 2025 increase is now completely embedded in business budgets, and employers who haven't recently re-modelled their staffing costs may be underestimating what a new hire actually costs them. For example, an employee on a £30,000 salary now costs an employer noticeably more in NI alone than they did before April 2025 — often several hundred pounds more per year.
3. The Lower Earnings Limit (LEL) Has Increased
One change that's easy to miss is the rise in the Lower Earnings Limit to £6,708 per year (£559 per month) for 2026/27. The LEL matters because it's the threshold that determines whether an employee builds up qualifying years for the State Pension and other contributory benefits — even if their earnings are too low to actually pay any NI. Payroll software needs to reflect this updated figure to keep pension qualification records accurate.
4. Self-Employed National Insurance (Class 4)
If you're self-employed, Class 2 NI was abolished for most people back in April 2024, but Class 4 contributions continue to apply on your trading profits:
- 6% on profits between £12,570 and £50,270
- 2% on profits above £50,270
These rates and thresholds are unchanged from the previous year, so self-employed workers won't see a direct rate rise — but frozen thresholds mean the same fiscal drag effect applies as profits grow.
5. A Change for UK Expats: Class 2 Voluntary Contributions Scrapped
One of the more specific changes for 2026/27 affects people living abroad who want to protect their UK State Pension record. From April 2026, the option to pay voluntary Class 2 National Insurance contributions from overseas has been removed. Anyone in this position now has to pay voluntary Class 3 contributions instead — which are set at a noticeably higher rate. If you're an expat or on international secondment and relying on voluntary contributions to keep your pension record intact, this is worth budgeting for, since the switch to Class 3 can significantly increase the annual cost of maintaining your record.
6. Employment Allowance Stays at £10,500
Smaller and medium-sized employers get some relief here: the Employment Allowance, which lets eligible businesses reduce their employer NI bill, remains at £10,500 for 2026/27. Crucially, the previous £100,000 employer-NI-liability eligibility cap remains removed, so larger eligible employers can still claim the full allowance — a change first introduced alongside the 2025 rate rise.
One exception to note: where a company has a single director who is also its only employee, the combination of director's NI rules and Employment Allowance exclusion rules means there's typically no relief available against employer NI in that specific situation.
7. Statutory Sick Pay Now Starts From Day One
Although not strictly an NI change, it's closely tied to payroll costs for 2026/27. Under the Employment Rights Act 2025, Statutory Sick Pay (SSP) is now payable from the first day of sickness, and the previous earnings floor for eligibility has been removed. This means more workers — including lower earners who wouldn't previously have qualified — are now entitled to SSP, and employers need to budget for this shift in absence costs. A temporary "Transitional Protection" policy has also been introduced to stop very low earners seeing a drop in their effective SSP rate under the new rules.
8. Why Frozen Thresholds Matter So Much
A theme running through almost every one of these changes is that the government has chosen to freeze thresholds rather than raise them in line with inflation or average wage growth. The Personal Allowance (£12,570), the higher-rate threshold (£50,270), and the NI thresholds have now been frozen for several years, with freezes extended out to 2030/31 (and in some cases as far as 2031) at recent Budgets.
The practical effect is that as wages rise to keep up with the cost of living, more and more of that extra income falls into taxable and NI-liable bands. Independent analysis suggests millions of additional taxpayers will be dragged into higher tax bands purely because of this freeze, even without any headline rate rise. It's often called a "stealth tax" for exactly this reason — nothing officially goes up, but take-home pay grows more slowly than gross pay.
9. What This Means for You
| If you are... | What changes in 2026/27 |
|---|---|
| An employee | NI rates unchanged, but frozen thresholds mean pay rises are taxed more heavily in real terms. |
| An employer | 15% rate and £5,000 threshold now fully embedded; LEL and SSP rules need updating in payroll. |
| Self-employed | Class 4 rates unchanged, but frozen thresholds still erode real income over time. |
| A UK expat abroad | Voluntary Class 2 NI is gone — you'll need to pay the higher Class 3 rate to protect your pension record. |
Frequently Asked Questions
Is employee National Insurance going up in 2026/27?
No — the employee rate stays at 8% (2% above the Upper Earnings Limit). However, frozen thresholds mean more of your income is taxed at these rates as wages rise.
Has employer National Insurance changed for 2026/27?
The rate and Secondary Threshold are unchanged from 2025/26 — 15% above £5,000 per year — but this is the first year businesses are budgeting for the full, ongoing cost of that 2025 increase.
What is the Lower Earnings Limit for 2026/27?
£6,708 per year, or £559 per month.
Can I still pay voluntary Class 2 NI from abroad?
No. From April 2026, expats must pay voluntary Class 3 contributions instead, which cost more.
Work Out Your Own Numbers
Rates and thresholds are one thing — seeing exactly how they apply to your own salary or business is another. If you want to check your own take-home pay, employer NI cost, or self-employed tax bill under the 2026/27 rules, you can run the numbers with a free UK tax and National Insurance calculator, which is kept updated with the latest official rates and thresholds each tax year.
Note: NI rates, thresholds and allowances can be revised at future Budgets. Always check current HMRC guidance or speak to a qualified accountant before making financial decisions based on these figures.
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