How much Class 4 National Insurance do sole traders pay in 2024/25?

Class 4 National Insurance is payable by self-employed sole traders on their profits above the Lower Profits Limit. For 2024/25 the rates are: - 6% on profits from £12,570 to £50,270 (reduced from 9% — a significant cut in 2024/25) - 2% on profits above £50,270 Note: the rate was reduced from 9% to 6% on 6 April 2024, saving a sole trader on £30,000 profit approximately £540/year. Class 4 NI is calculated and paid via your Self Assessment tax return — you don't need to set it up separately. It is paid at the same time as your income tax, with the balancing payment due 31 January and Payments on Account due in January and July. Class 4 NI does not count directly towards the State Pension in the traditional sense, but from 2024 HMRC treats it as building your National Insurance record.

  • Rate: 6% on profits £12,570–£50,270 in 2024/25 (cut from 9% — saves up to £1,131/year)
  • Rate: 2% on profits above £50,270
  • Calculated automatically via Self Assessment — no separate setup required
  • Paid with your income tax: balancing payment 31 January, plus Payments on Account
  • From 2024, Class 4 NI builds your State Pension record

Related Questions

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