Class 4 National Insurance Contributions are the self-employed NIC charge levied on the taxable profits of sole traders, including CIS subcontractors, in addition to income tax.
For 2026/27, the Class 4 rates are:
- 6% on profits between £12,570 and £50,270.
- 2% on profits above £50,270.
Class 4 NIC is calculated on the same Self Assessment return as income tax and is payable on 31 January following the end of the tax year (with a second payment on account on 31 July, where required). Unlike Class 1 NIC (employed), Class 4 is not deducted at source: it is assessed and paid in arrears through Self Assessment.
Class 4 is separate from Class 2 NIC. Class 2 (£0 to pay above the £7,105 small profits threshold in 2026/27, treated as paid automatically) accrues entitlement to the State Pension and certain benefits. Class 4 provides no benefit entitlement and is purely a revenue charge on profits.
Because CIS deductions are taken on gross labour income and do not include any Class 4 NIC element, a subcontractor who has large CIS deductions but also significant expenses may find that, after allowable expenses bring their taxable profit below £12,570, they owe no Class 4 NIC at all, and the CIS deductions represent a straightforward overpayment of income tax.
Worked example at 2026/27 rates: a subcontractor with gross CIS income of £40,000 and allowable expenses of £12,000 has taxable profit of £28,000. After the £12,570 personal allowance, taxable income is £15,430. Income tax: 20% of £15,430 = £3,086. Class 4 NIC: 6% of (£28,000 minus £12,570) = 6% of £15,430 = £926. Total liability: £4,012. CIS deductions taken (20% of £40,000 labour): £8,000. Refund due: approximately £3,988.
For the full National Insurance picture for CIS workers, see our guide to CIS National Insurance: Class 2, Class 4 and employer NIC.