National Insurance is the UK's social security contribution. Paying it, or being credited with it, is what builds your record for the State Pension and some other benefits, according to GOV.UK. It sits alongside income tax on a payslip but runs on different rules.
Employees pay Class 1 contributions. For 2026 to 2027 the rate for category A is nothing on the first £242 a week, 8% on earnings from there to £967, and 2% on everything above, as the rates table shows. Over a year the same thresholds come to £12,570 and £50,270. On a £35,000 salary paid evenly, that is 8% of £22,430, or £1,794.40.
Three differences from income tax catch people out. The thresholds are set per pay period, so a large bonus in one month is charged in that month rather than smoothed across the year. Contributions stop once you reach State Pension age, while income tax carries on. And the main rate falls to 2% at the upper limit just as income tax rises to 40%, so the combined rate on the next pound goes from 28% to 42%, not to 48%.
Your employer pays its own share on top, at 15% above a threshold of £5,000 a year, according to the 2026 to 2027 employer rates. It never shows on your payslip, though it is part of what you cost to employ. Both are deducted and reported through PAYE, the payroll system run on GOV.UK's employer rules.
The take-home pay calculator charges category A contributions on your salary and lists the employer's share under the total cost to employer. Scotland sets its own income tax bands, but National Insurance is the same across the UK.