Class 2 National Insurance: what you need to know
National Insurance is money paid to HMRC by employees, employers, and the self-employed. Class 2 National Insurance is paid by self-employed people in order to qualify for benefits like the State Pension. You can find out more about National Insurance on our accounting glossary.
Example: how to calculate Class 2 National Insurance contributions
A freelance tree surgeon is calculating their Class 2 National Insurance for the 2023/24 tax year. They need to know three things to work out how much Class 2 National Insurance they owe:
- Their taxable profit: £20,454
- The Lower Profits Limit: £12,570
- The Class 2 National Insurance rate: £3.45 per week
For the tax year 2023/24 their taxable income exceeds the Lower Profits Limit, which means they are due to pay Class 2 contributions. At £3.45 per week, for the year they will pay:
52 x £3.45 = £179.40 in Class 2 National Insurance contributions
These contributions will be calculated annually as part of their Self Assessment tax return.
How to pay Class 2 National Insurance contributions
Class 2 National Insurance contributions are calculated annually as part of your Self Assessment tax return. The total amount of contributions due will be included in the overall bill. This is sent to you following completion of your return and includes any Income Tax you owe.
Online or telephone banking (Faster Payments) | Same or next day |
CHAPS | Same or next day |
Bacs | Three working days |
Debit card online | Same or next day |
Business credit card (1.5% charge, personal credit cards are no longer accepted) | Three working days |
Direct Debit | Three working days |
Standing order | Three working days |
At your bank or building society | Three working days |
Online or telephone banking: If you’re paying by online or telephone banking (Faster Payments, CHAPS or Bacs) details for the HMRC bank account you should pay your tax bill into on the government's website.
Debit card or business credit card: If you are paying by debit or credit card you can do so by following the links from your HMRC online account.
Direct Debit: You can set up a Direct Debit from your HMRC online account. The first time you set up a Direct Debit for Self Assessment allow at least five working days the before you submit your return to ensure the payment is taken from your account in time. Thereafter allow for at least three days. Note that you have to set up a new direct debit every time you wish to make a payment and that payment on account requires a separate Direct Debit.
At your bank or building society: You can only pay your Income Tax bill at your bank or building society if you still get paper statements from HMRC and have the paying-in slip they sent to you in the post. Payments can be made by cash or cheque made payable to ‘HM Revenue and Customs only’ followed by your Unique Taxpayer Reference (UTR) followed by the letter ‘K’.
Previous Class 2 National Insurance rates
2023-24 | £3.45/week |
2022-23 | £3.15/week |
2021-22 | £3.05/week |
2020-21 | £3.05/week |
2019-20 | £3.00/week |