Calculating Class 4 National Insurance contributions

Calculating Class 4 National Insurance contributions

Class 4 National Insurance contributions (NICs) are payable at 8 per cent on profits between for 2009-10 plus 1 per cent on any profit over that amount.

Therefore, not all self-employed people become liable to pay Class 4 NICs.

When you file your annual Self Assessment tax return, the amount of income you declare will be the basis on which these Class 4 NICs are calculated.

If you become liable, you must pay Class 4 contributions, regardless of whether or not – as an employed earner – you pay Class 1 NICs.

If you have more than one business, special rules apply for calculating adjustments to profits on which you pay Class 4 NICs. Download guidance on working out your Class 4 NICs liability from the HM Revenue & Customs (HMRC) website (PDF, 105K) – Opens in a new window.

You do not have to work out the amount of Class 4 contributions you owe. If you send in a paper tax return by 31 October following the end of the tax year and leave the space blank, HMRC will work it out for you.

However, if you want to work out your Class 4 NICs, you can use the Class 4 calculator in the notes accompanying your Self Assessment supplement.

If you file your return online, your Class 4 NICs will be calculated for you automatically.

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