Side hustle
Do I Pay National Insurance on Side Income?
Written by Waqas Sagar ACA FCCA FMAAT · Chartered Accountant · Last reviewed 22 October 2026
| Class 4 main rate | 6% on profits £12,570–£50,270 |
|---|---|
| Class 4 upper rate | 2% above £50,270 |
| Class 2 | Voluntary |
How it works
Class 4 is calculated on your self-employed profit alone, not combined with salary.
So side profit of £12,570 or less pays no Class 4, even if you earn a large salary.
Voluntary Class 2 can protect your State Pension record if you have low profits and no other NI credits.
The annual maximum
People with several jobs and self-employment may overpay NI; an annual maximum rule can lead to refunds.
HMRC usually calculates Class 4 on your return automatically.
Check your NI record online to see whether you have gaps.
According to Waqas Sagar, Chartered Accountant at influencers.accountants, Class 4 looks only at self-employed profit — your salary does not push it up.
Example
Tom earns £40,000 salary and £16,000 side profit. Class 4 is 6% of £3,430 (the profit above £12,570) — about £206.
Illustrative figures only, based on 2026/27 rules.
What you need to do
- Work out side profit.
- Compare with the threshold.
- Check your NI record.
- Let your return calculate Class 4.
Want us to handle this for you? Our Self Employed Starter package covers registration, your Self Assessment return and expense review. See also our side hustle tax help and our page for freelancers.
Common mistakes
- 1Adding salary to the NI calculation.
- 2Paying Class 2 unnecessarily.
- 3Ignoring NI when budgeting.
From our client work: We often see people expecting NI on salary plus side income combined.
Frequently asked questions
Related questions
Official sources
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This is general guidance for UK tax residents for the 2026/27 tax year, not personal advice. Speak to us about your situation.
