National Insurance for Self-Employed Drivers Explained

Self-employed drivers pay Class 4 National Insurance at 6% on profits over £12,570 up to £50,270, and 2% on profits above £50,270. Most no longer pay Class 2 at all, because it is treated as paid once profits reach the small profits threshold. Both are dealt with through your Self Assessment return, alongside Income Tax. This guide explains the rules for 2025/26 and 2026/27 for private hire, ride-hailing app and delivery drivers who work for themselves.

Key takeaways

• National Insurance is charged on profit, not on fares or payouts.
• Class 4 is 6% between £12,570 and £50,270 of profit, then 2%.
• Class 2 is treated as paid if profits are £6,845 or more in 2025/26, or £7,105 or more in 2026/27.
• Below that threshold you pay nothing, but can pay Class 2 voluntarily.
• Class 4 does not count towards the State Pension. Class 2 does.

What is self-employed National Insurance?

National Insurance contributions are what build your entitlement to the State Pension and certain benefits. Employees pay Class 1 through their wages. People who work for themselves fall under two different classes, Class 2 and Class 4, and which one applies depends on profit. HMRC's summary is on GOV.UK under self-employed National Insurance rates.

Profit means your self-employed income less your allowable expenses. For a driver, income is the full value of fares, tips and bonuses. Expenses include platform service fees, fuel or the mileage allowance, insurance, licensing and similar business costs. Our driver tax deductions checklist lists what usually qualifies. Only costs you have genuinely incurred for the business, and can evidence, should go in.

Class 4: the one most drivers actually pay

If your profits are more than £12,570 a year, you must pay Class 4. HMRC's published National Insurance rates and allowances show the same figures for 2025/26 and 2026/27:

• Lower Profits Limit: £12,570.
• Upper Profits Limit: £50,270.
• Rate between the two limits: 6%.
• Rate above the Upper Profits Limit: 2%.

Class 4 is a charge on profit only. GOV.UK is clear that it does not count towards state benefits or pensions. You stop paying it from the 6 April after you reach State Pension age.

Class 2: usually nothing to pay

If your profits are at or above the small profits threshold, Class 2 contributions are treated as having been paid to protect your National Insurance record. You do not hand over any money for them. The threshold is £6,845 for 2025/26 and £7,105 for 2026/27.

If your profits are below the threshold, you do not have to pay anything, but the year will not count towards your record unless you have contributions or credits from elsewhere. You can choose to pay voluntary Class 2 at £3.50 a week for 2025/26 or £3.65 a week for 2026/27. You need 10 qualifying years to get any new State Pension, so a part-time driver in a low-profit year should look at this rather than ignore it. GOV.UK explains the options under voluntary National Insurance. Voluntary contributions do not always increase your pension, so check your record and forecast first.

Class 2 and Class 4 compared

Step by step: working out and paying your National Insurance

1. Add up your gross income for the tax year (6 April to 5 April) from every platform and operator, before any fees are taken off.
2. Deduct allowable expenses to reach your profit.
3. Compare profit with the small profits threshold. At or above it, Class 2 is treated as paid. Below it, decide whether to pay voluntarily.
4. Compare profit with £12,570. If it is higher, take off £12,570 and apply 6% to the rest, up to £50,270.
5. Apply 2% to any profit above £50,270.
6. File your Self Assessment return. HMRC's calculation adds Class 4 to your Income Tax automatically. Our driver tax return guide walks through the return.
7. Pay by 31 January. For 2025/26 that is 31 January 2027.
8. Budget for payments on account. These include Class 4 and are due by 31 January and 31 July unless last year's bill was under £1,000 or more than 80% of it was collected outside Self Assessment. See payments on account explained.

Worked example (illustrative)

"Kwame Addo", an illustrative example, is a self-employed private hire driver. In 2025/26 his fares and tips total £46,000 and his allowable expenses come to £16,000, giving a profit of £30,000.

• Class 2: his profit is above £6,845, so Class 2 is treated as paid. Amount to pay: £0.
• Profit above the Lower Profits Limit: £30,000 less £12,570 is £17,430.
• Class 4 at 6%: £17,430 x 6% is £1,045.80.
• His profit is below £50,270, so nothing is charged at 2%.

Kwame's National Insurance for 2025/26 is £1,045.80. It is added to his Income Tax on the same return and is due by 31 January 2027. Had his National Insurance been worked out on his £46,000 of fares, the figure would have been far too high, which is why accurate expense records matter.

The driver and figures are invented for illustration and are not a real client.

If you also have a PAYE job

Some drivers work for themselves alongside employment. GOV.UK says your employer will deduct Class 1 from your wages and you may also have to pay Class 4 on your self-employed work. How much depends on your combined wages and self-employed profit, and HMRC tells you what is due after you file your return. You cannot defer Class 4. If you think you have overpaid, you can check your record and check how to claim a National Insurance refund.

Common mistakes

• Using payouts as income. Report gross fares, then claim platform fees as an expense.
• Budgeting for Income Tax only. Class 4 adds 6% on most of a typical driver's profit.
• Assuming Class 4 builds your pension. It does not.
• Ignoring a low-profit year. Below the small profits threshold the year may leave a gap in your record.
• Forgetting payments on account. The first January bill can be one and a half times the tax for the year.
• Missing or inflating expenses. Claim what you can evidence, no more and no less.

How we can help

We prepare accounts and Self Assessment returns for self-employed drivers, work out profit correctly so that Income Tax and National Insurance are right, and tell you in advance what to set aside. New to this? Start with our first year guide for delivery drivers. Uber driver accounting starts from £49 per month on a fixed fee. See our driver accounting service, view our pricing, or contact us well before 31 January 2027.