Small Profits Threshold for gig workers (2025-26)

What it is

The small profits threshold is the profit level at which self-employed people start being treated as having paid Class 2 National Insurance. For 2025-26 the threshold is £6,845. Cross it and HMRC credits you with Class 2 for the year at no cost, so you get a qualifying year towards the new state pension. Sit below it and you need to choose whether to pay voluntary Class 2 at £3.50 a week, which works out at about £182 for the full year.

How it applies to gig workers

The threshold catches almost every part-time rider and driver at some point. A Deliveroo rider working evenings and weekends with £180 a week in gross income and decent e-bike expenses might land on £7,000 of profit, which is just over the line and gets a qualifying year free. Another rider on £150 a week with higher costs might end up at £6,200 profit, which sits just under, and would need to pay £182 of voluntary Class 2 to keep the pension year.

The threshold rule applies after expenses. An Uber driver with £22,000 turnover and £15,500 of expenses has £6,500 profit, which is under the line. The same driver with £14,000 of expenses has £8,000 profit, which is over. That is why how you record expenses and choose between mileage and actual costs affects your state pension position, not just your tax.

If your profit is below £6,845 and the pension year matters to you, voluntary Class 2 is cheap protection. You tick a box on your Self Assessment return and pay the £182 through the normal tax payment. Buying a missing year later through Class 3 voluntary contributions costs several times more. On the other hand, if you have a PAYE job running alongside your gig work and it already gives you a qualifying year from Class 1 NI, you do not need to pay Class 2 voluntarily on top. Check your National Insurance record on GOV.UK before deciding.

One more practical point. Class 4 NI does not start until profits hit £12,570, so a gig worker with profit between £6,845 and £12,570 gets a qualifying pension year and pays no income tax or Class 4 NI on that profit. That is a rare sweet spot and a good reason not to chase turnover past £12,570 without planning for the 6% Class 4 charge.

What you should do about it

• Work out your 2025-26 gig profit after allowable expenses.
• If over £6,845, your Class 2 is treated as paid and you get a qualifying pension year with nothing extra to pay.
• If under £6,845, check your GOV.UK National Insurance record. If the year is not already covered, consider paying voluntary Class 2 at £3.50 a week on your Self Assessment return.
• Compare the cost of voluntary Class 2 (about £182) against later Class 3 top-ups before you decide to skip it.
• Keep clean expense records so your profit figure holds up if HMRC asks.

Last reviewed

19 April 2026

Internal links this page emits (3-5):

• class 2 ni — anchor: "Class 2 NI"
• class 4 ni — anchor: "Class 4 NI"
• class 2 voluntary payment — anchor: "Class 2 voluntary payment decision tool"
• trading allowance — anchor: "trading allowance"
• maternity allowance gig — anchor: "Maternity Allowance for gig workers"

Primary source used:

• Research/S2-tax/2.7-national-insurance-for-gig-workers.md