What are class 2 national insurance contributions?
Answered 11 March 2026
Here is a comprehensive answer on Class 2 National Insurance Contributions (NICs):
What the law says
Class 2 NICs are governed by section 11 of the Social Security Contributions and Benefits Act 1992 (SSCBA 1992). The key legislative framework, as updated by successive annual regulations, is as follows:
- Who pays: Class 2 NICs are payable by self-employed earners.
- Rate (2025/26): The weekly rate is £3.50, as set by the Social Security (Contributions) (Rates, Limits and Thresholds) Regulations 2025.
- Rate (2026/27): The weekly rate will increase to £3.65 from 6 April 2026.
- Small Profits Threshold (SPT): Set at £6,845 for 2025/26 and £7,105 for 2026/27.
HMRC guidance / practice
Nature of Class 2 NICs: Class 2 NICs are flat-rate weekly contributions paid by self-employed earners. Unlike Class 4 NICs (which are profit-related), Class 2 contributions count towards benefit entitlement, including the State Pension.
Who is liable:
- Self-employed earners who have reached age 16, have not reached State Pension age, and satisfy the prescribed conditions of residence or presence in the UK.
- From 6 April 2013, sleeping and inactive partners in a partnership are also considered gainfully employed as self-employed earners and are liable to Class 2 NICs.
How liability has evolved:
| Period | Rule |
|---|---|
| 6 April 2015 – 5 April 2022 | Liability arose where relevant profits were at or above the SPT; those below could pay voluntarily |
| 6 April 2022 – 5 April 2024 | Liability arose only where profits exceeded the Lower Profits Threshold (LPT); those between SPT and LPT were treated as having paid |
| From 6 April 2024 | The LPT was removed — there is no longer a legal liability to pay Class 2 NICs. Self-employed earners with profits at or above the SPT are treated as having paid Class 2 NICs. Those below the SPT may still pay voluntarily to protect benefit entitlement |
Collection method: From the 2015/16 tax year, Class 2 NICs are assessed, calculated, and payable annually through Self Assessment for most self-employed earners.
Voluntary payments: A self-employed earner with profits below the SPT (or no relevant profits) can choose to pay Class 2 NICs voluntarily to protect entitlement to the State Pension and certain benefits.
Citation sources
Following a change of view taking effect from 6 April 2013, HMRC consider that sleeping and inactive partners in a partnership are gainfully employed as self-employed earners and so are liable to Class 2 and Class 4 National Insurance Contributions. Individual (non-corporate) partners are liable to Class 2 and Class 4 NICs on their own share of the trade or profession carried on by the partnership. Class 2 and 4 contributions are also payable on the taxable profits of sleeping partners and inact
From tax year 2015 to 2016 Class 2 National Insurance contributions (NICs) are assessed, calculated and payable annually through the Self Assessment (SA) system. Relevant profits are used when determining whether a Class 2 NICs liability exists, and are those profits in respect of which Class 4 NICs are payable under section 15 of SSCBA 1992. Up to 5 April 2022 a Class 2 NICs liability only arose where the self-employed earner had relevant profits equal to or above the small profits threshold (S
Part 1 General Citation and commencement 1 These Regulations may be cited as the Social Security (Contributions) (Rates, Limits and Thresholds Amendments, National Insurance Funds Payments and Extension of Veteran's Relief) Regulations 2025 and come into force on 6th April 2025. Part 2 Rates, limits and thresholds for National Insurance Contributions Interpretation 2 In this Part— “ the Act ” means the Social Security Contributions and Benefits Act 1992; “ the Northern Ireland Act ” means the So
be considered a trade see PIM4300. From 6 April 2022 to 5 April 2024 A Class 2 NICs liability only arises where the self-employed earner has relevant profits exceeding the Lower Profits Threshold (LPT). Where a self-employed earner does not have relevant profits or their relevant profits are below the Small Profits Threshold (SPT), Class 2 NICs can be paid voluntarily to protect entitlement to State Pension and certain benefits. Where the self-employed earner has relevant profits from the SPT to
Part 1 General Citation and commencement 1 These Regulations may be cited as the Social Security (Contributions) (Rates, Limits and Thresholds Amendments, National Insurance Funds Payments and Extension of Veteran’s Relief) Regulations 2026 and come into force on 6th April 2026. Part 2 Rates, limits and thresholds for National Insurance Contributions Interpretation 2 In this Part— “ the Act ” means the Social Security Contributions and Benefits Act 1992; “ the Northern Ireland Act ” means the So
In the 2014 Budget, the Government announced that collection of Class 2 NIC will move into Self Assessment (SA) for the majority of self-employed customers, so that they can deal with their tax and National Insurance Contributions (NIC) payments at the same time. These proposals were approved by Parliament on 12 February 2015 when the National Insurance Contributions Act 2015 was passed and the changes came into effect from the start of the 2015-16 tax year, making paying Class 2 NIC simpler and
Class 4 National Insurance Contributions are payable by the self employed on profits between a lower and upper limit, and are collected with tax under a Self Assessment. Unlike Class 2, Class 4 contributions do not count at all for benefit purposes.