Class 4 National Insurance is paid by self-employed individuals as a percentage of their trading profits above a set threshold. It is calculated and paid alongside Income Tax through the Self-Assessment system.
Rates and thresholds
A main rate applies to profits within the standard band, with a lower rate charged on profits above the upper threshold. Class 4 contributions do not count towards State Pension entitlement, unlike Class 2.
Tax rules depend on individual circumstances and can change. This glossary is general information rather than personalised tax advice.