john banks

If you are self employed and employed in the same year, does your employment income count towards the class 4 NI upper profits limit?

As an example, if you made £40k from employment, and £40k from self employment, would you pay 8% or 1% class 4 NI on most of the self employment?

zip106

You'll pay 8% Class 4 only on your self-employed profits.

This may help you -

http://www.nidirect.gov.uk/index/inf...-insurance.htm

http://www.nidirect.gov.uk/index/inf...ed-example.htm

john banks

What I'm not clear on though is whether employed earnings affect when you drop from 8 to 1% class 4. The effective tax rate on marginal income from self employment is either 48 or 41% which is a difference that influences whether you might take on extra work.

john banks

It does seem like you pay 8% until your self employed earnings reach the upper profits limit, irrespective of what employed earnings are.