Finance Tool · 2026/27 tax year
Employer NI Calculator
This employer NI calculator works out what a hire actually costs your business. For the 2026/27 tax year, UK employers pay Class 1 secondary National Insurance at 15% on each employee’s earnings above the Secondary Threshold of £5,000 a year, with no upper limit.
It takes the answer all the way to the true cost of employment rather than stopping at the National Insurance line: secondary contributions by category letter, the £10,500 Employment Allowance applied once across the whole payroll rather than per employee, the automatic enrolment pension you must fund on top, and the Apprenticeship Levy once your pay bill passes £3,000,000. Add every member of staff to watch the allowance being consumed and to see what your next hire actually costs, which is rarely what the first one did. Category letters cover the standard case, employees over State Pension age, under-21s, apprentices, veterans and the Freeport and Investment Zone reliefs, so the reliefs that employers most often miss are one dropdown away rather than buried in a footnote.
Every rate verified against gov.uk on 3 August 2026. Nothing you type leaves your browser.
Work out your employer National Insurance and cost of employment
Everything is converted to an annual figure, which is how the thresholds and the allowance are legally defined.
Most businesses and charities can claim if less than half their work is in the public sector. The £10,500 is a single business-level figure, not one per employee, and since April 2025 there is no longer a £100,000 liability cap on claiming it.
The statutory minimum is charged on qualifying earnings only — the slice between £6,240 and £50,270.
Statutory minimum 3%, within an 8% total
Leave blank to use the salaries above. The levy only bites over £3,000,000, and the pay bill is not the same base as NI-able pay.
- Gross salariesWhat the employee is paid before deductions
- £30,000.00
- Employer National Insurance15% on £25,000 above £5,000 — category A
- £3,750.00
- Employer pension contributions3% of qualifying earnings (£6,240–£50,270)
- £712.80
2026/27 tax year. Secondary Class 1 at 15% above £5,000 (HMRC), employer pension on the basis selected, Apprenticeship Levy at 0.5% less the £15,000 allowance.
Claiming the Employment Allowance would cut this bill by £3,750.00. It is switched off by default because eligibility is not automatic — public-sector work, connected companies and sole-director payrolls all restrict it. Turn it on above once you have checked the gov.uk eligibility rules.
- Below the £5,000 threshold£5,000
- Charged at 15%£25,000
- Gross salaries£30,000
- Employer NI£3,750
- Employer pension£713
Method
How employer National Insurance is worked out
Employer National Insurance, properly called Class 1 secondary contributions, is a charge on the employer rather than a deduction from the employee. It never appears on a payslip, which is exactly why it goes missing from hiring budgets. Working it out by hand takes one subtraction and one multiplication, and it is worth doing once so you can sanity-check what your payroll software reports. For 2026/27 the calculation for a standard category A employee is a single line:
employer NI = (annual pay − £5,000) × 15%
On a £30,000 salary that is £30,000 less the £5,000 Secondary Threshold, giving £25,000 of chargeable earnings, multiplied by 15% to give £3,750.00 for the year. Add the automatic enrolment pension minimum of £712.80 and the true cost of that hire is £34,462.80 (HMRC and DWP, 2026/27 rates).
Where a relief applies the shape is the same but the threshold moves. Categories M, H and V charge nothing until £50,270 and categories F and N until £25,000, then the same 15% applies to everything above. The letter belongs to the employee at a point in time, not to the job, so it can change part-way through a year — an apprentice finishing their scheme or turning 25, or someone reaching State Pension age. Payroll has to switch the letter from that point forward rather than restate the year, which is why a mid-year change makes the annual figure here an approximation for that one employee.
Start from annual gross pay
Take the employee's gross pay for the tax year, before any deduction. Anything given up under a valid salary sacrifice arrangement is not pay and does not count.
Subtract the threshold for their letter
£5,000 for the standard categories A and C, £50,270 for under-21s, apprentices under 25 and veterans, £25,000 in a Freeport or Investment Zone special tax site.
Charge 15% on everything left
One multiplication finishes the employee: the same rate applies to every pound above the threshold, so unlike income tax there is no band-by-band breakdown to work through.
Take the allowance off once, at the end
Add up the secondary contributions for every employee, then offset up to £10,500 of Employment Allowance against that business-level total — not against each employee individually.
Worked examples
Five real employer scenarios
A café owner takes on a first full-time employee
One employee on £28,000, category A, Employment Allowance claimed, automatic enrolment minimum pension.
The Employment Allowance swallows the whole National Insurance bill, because £3,450 is well inside the £10,500 available. For a first hire the pension, not the NI, is the on-cost that actually leaves the bank account — which is exactly the opposite of what most first-time employers budget for.
An agency with four staff exhausts its allowance
Four employees on £28,000 each, category A, one Employment Allowance claimed at business level.
The allowance is a single £10,500 for the whole business, not £10,500 each. Three hires are effectively NI-free and the fourth is not, so the marginal cost of growing a team jumps once the allowance runs out. Any calculator that subtracts £10,500 per employee reports £0 here and is wrong by £3,300.
A single-director company on a £12,570 salary
One director who is the only employee liable for secondary Class 1, category A, no automatic enrolment duty.
The sole-director exclusion is the whole answer: the £10,500 allowance the internet keeps promising is not available, so the full £1,135.50 is payable. Since the Secondary Threshold fell to £5,000 in April 2025, even the classic £12,570 director salary now carries real employer NI — the figure was £478.86 under the old £9,100 threshold and 13.8% rate.
A 22-year-old apprentice against a standard hire
Two identical £22,000 salaries, one on category H (apprentice under 25) and one on category A.
Category H costs nothing in employer NI at this salary against £2,550.00 on category A — a saving of £2,550.00. The employer pension is identical either way at £472.80, because no relief applies to pensions. The relief stops dead at £50,270, so it is worth nothing extra on a senior appointment.
A senior hire at £85,000 with the allowance already spent
One employee on £85,000, category A, automatic enrolment minimum pension, allowance already used elsewhere.
Qualifying earnings stop at £50,270, so the pension contribution here is identical to the one on a £50,270 salary and every extra pound of pay carries National Insurance alone. That makes the on-cost percentage fall as salaries rise even though the cash amount climbs, which is the opposite of what most hiring budgets assume. Budget around 15.7% on top for a hire at this level, and expect the Employment Allowance to have been spent on the rest of the payroll long before this person is reached.
Category letters
What each NI category letter costs the employer
| Letter | Who it covers | 0% up to | NI on £30,000 | NI on £60,000 |
|---|---|---|---|---|
| A, B, J | Standard — most employees | £5,000 | £3,750.00 | £8,250.00 |
| C | Over State Pension age | £5,000 | £3,750.00 | £8,250.00 |
| M, Z | Under 21 | £50,270 | £0.00 | £1,459.50 |
| H | Apprentice under 25 | £50,270 | £0.00 | £1,459.50 |
| V | Veteran, first civilian job | £50,270 | £0.00 | £1,459.50 |
| F, I, L, S | Freeport special tax site | £25,000 | £750.00 | £5,250.00 |
| N, E, D, K | Investment Zone special tax site | £25,000 | £750.00 | £5,250.00 |
Letters that only change the employee’s contribution are grouped with their employer equivalent: B and I are the married women’s reduced rate, and J, Z, L, D and K are deferment cases where National Insurance is already being paid on another job. Category X, for employees exempt from National Insurance such as those under 16, carries 0% for both sides and is outside the Apprenticeship Levy pay bill.
The asymmetry
Why employer NI overtakes employee NI on higher salaries
Employer National Insurance is uncapped — unlike employee National Insurance, which falls to 2% above £50,270, the employer rate stays at 15% on every pound above £5,000. The two also start from different points: the employee pays nothing until the Primary Threshold of £12,570, while the employer starts at £5,000. The result is a gap that widens without limit as salaries rise.
| Salary | Employee pays | Employer pays | Employer share |
|---|---|---|---|
| £15,000 | £194.40 | £1,500.00 | 88.5% |
| £30,000 | £1,394.40 | £3,750.00 | 72.9% |
| £50,270 | £3,016.00 | £6,790.50 | 69.2% |
| £85,000 | £3,710.60 | £12,000.00 | 76.4% |
| £150,000 | £5,010.60 | £21,750.00 | 81.3% |
The employer pays more than the employee at every salary, and the gap is U-shaped. It is widest at the bottom, where a £15,000 salary costs the employer £1,500.00 against the employee’s £194.40, because the employer starts charging £5,000 earlier. It is narrowest at the Upper Earnings Limit, where the employee’s 8% band has run its full course. Then it widens again: at £150,000 the employer pays £21,750.00 against the employee’s £5,010.60 — more than four times as much — because the employee’s marginal rate collapsed to 2% at £50,270 and the employer’s never moved. To see the same salary from the employee’s side, use the UK salary calculator.
United Kingdom · 2026/27
The 2026/27 figures and where they come from
Every figure on this page is set by HM Revenue & Customs or the Department for Work and Pensions and applies across the whole United Kingdom. National Insurance is not devolved: unlike income tax, where Scotland sets its own bands, the same secondary rate and thresholds apply in England, Scotland, Wales and Northern Ireland. HMRC’s rates and thresholds guidance for employers, last updated on 5 June 2026, is the primary source for the National Insurance figures; the DWP review published on 18 December 2025 is the source for the automatic enrolment band.
| Threshold | A week | A month | A year |
|---|---|---|---|
| Secondary Threshold | £96 | £417 | £5,000 |
| Upper Secondary Threshold (under 21, apprentice, veteran) | £967 | £4,189 | £50,270 |
| Freeport and Investment Zone upper secondary threshold | £481 | £2,083 | £25,000 |
| Lower Earnings Limit | £129 | £559 | £6,708 |
| Upper Earnings Limit (employee rate drops to 2%) | £967 | £4,189 | £50,270 |
What changed in April 2025, and why old calculators are wrong
Two changes took effect on 6 April 2025 and both went the employer’s way. The secondary rate rose from 13.8% to 15%, and the Secondary Threshold fell from £9,100 to £5,000 — a much larger effect than the rate change, because it exposed an extra £4,100 of every salary to the charge. A £30,000 salary that cost £2,884.20 in employer NI in 2024/25 costs £3,750.00 now, a rise of 30%. The Employment Allowance was raised from £5,000 to £10,500 at the same time and the £100,000 liability cap on claiming it was abolished, which offsets the increase completely for employers with fewer than about three average-salary staff and not at all for larger ones. For 2026/27 none of these figures moved again.
Employment Allowance
How the £10,500 allowance actually works
The Employment Allowance is a reduction in the employer’s secondary Class 1 bill, not a grant and not a per-employee discount. You claim it through your payroll software, and it is then drawn down each pay run against whatever secondary contributions you owe until the £10,500 has gone or the tax year ends, whichever is sooner. A business with £13,800.00 of gross secondary contributions across four staff uses the whole allowance and still pays £3,300.00; a business with one employee on £28,000 uses only £3,450.00 of it and pays nothing.
The claim does not carry forward automatically from one tax year to the next in every case, and it is worth checking each April. Four restrictions decide eligibility: public bodies and businesses doing more than half their work in the public sector cannot claim unless they are a charity; connected companies and charities share a single allowance between them; a company whose only employee liable for secondary Class 1 is its sole director cannot claim; and some sectors remain subject to de minimis state aid limits. The £100,000 liability cap that used to exclude larger employers was removed from April 2025 and no longer applies.
Get these right
Common mistakes and edge cases
Applying the Employment Allowance to every employee. The £10,500 offsets your business’s entire secondary Class 1 bill for the year, not each employee’s. It is drawn down payroll run by payroll run until it is used up or the tax year ends, whichever comes first. Work out gross NI across the whole payroll first, then take the allowance off once. The multi-employee view here shows the headroom left, which is the number that tells you what your next hire really costs.
Giving a sole-director company the allowance anyway. gov.uk is explicit: if your company has only one director, they must not be the only employee liable for secondary Class 1 National Insurance. A great many personal-service companies fail this test and are told by online calculators that they owe nothing. Tick the sole-director box here and the allowance switches off with the reason attached, rather than silently returning zero.
Treating the under-21, apprentice or veteran relief as unlimited. The 0% employer rate for categories M, H and V stops at the Upper Secondary Threshold of £50,270, after which the normal 15% resumes. An under-21 on £60,000 costs £1,459.50 in employer NI, not nothing. Freeport and Investment Zone reliefs cut out far earlier, at £25,000.
Thinking staff over State Pension age are free of NI. Category C removes the employee’s contribution only. The employer still pays 15% above the Secondary Threshold on exactly the same terms as category A. This asymmetry catches out employers who see “no National Insurance” on an older worker’s payslip and assume the saving is theirs too.
Carrying over the old £9,100 threshold or 13.8% rate. Both changed on 6 April 2025: the Secondary Threshold fell from £9,100 to £5,000 and the rate rose from 13.8% to 15%. Any figure copied from 2024/25 content overstates the threshold by £4,100 and understates the rate by 1.2 percentage points, which on a £30,000 salary is a £1,111 error in the employer’s favour. Check that whatever tool you use stamps the tax year on its answer.
Confusing the Apprenticeship Levy pay bill with NI-liable pay. The two bases are different. The pay bill includes earnings for under-21s and apprentices under 25 even though no employer NI may be due on them, and excludes benefits in kind charged to Class 1A along with the earnings of under-16s. Reusing your NI-able total as the pay bill will misstate the levy in both directions.
Charging the auto-enrolment minimum on full pay. The statutory 3% is charged on qualifying earnings — the slice between £6,240 and £50,270 — not on gross salary. On £30,000 that is £712.80, not £900, and on £60,000 it is £1,320.90 rather than £1,800 because the band is capped. Plenty of employers do use a more generous basis, so switch the basis here if yours pays on full salary.
Costing a director’s bonus as though it were an employee’s. A mid-year bonus paid to a director does not get the benefit of period-by-period thresholds the way an ordinary employee’s would, because a director is assessed across the whole year at once. Budget a director’s bonus at the full 15% from the first pound, and see the directors’ National Insurance question below for how the annual earnings period works.
Reading monthly and weekly thresholds as exact twelfths. HMRC publishes the Secondary Threshold as £96 a week and £417 a month alongside the £5,000 annual figure, and those are rounded rather than exact divisions. Real payroll charges period by period, so a monthly-paid employee’s NI for the year can land a few pounds either side of the annual calculation shown here. It is a rounding difference, not a modelling error, and it never reaches double figures on a normal salary.
Related
Related employment cost concepts
Salary sacrifice and the employer NI saving. Pay given up under a valid salary sacrifice arrangement is not earnings, so it never reaches the secondary Class 1 charge. At 15% the employer saves £150 for every £1,000 sacrificed into a pension, which is why many employers now pass part of that saving back into the employee’s pot and make sacrifice the scheme default. The salary sacrifice calculator models both sides of that trade, including the announced 2029 cap on the exemption.
What the employee actually takes home. The mirror image of this page. An offer letter quotes gross salary, but the candidate is deciding on net pay after income tax, employee National Insurance, pension and any student loan — and you are deciding on the number this calculator produces. The UK salary calculator gives the employee’s view of the same salary, including income tax, employee National Insurance, pension and student loan. Running both figures before an offer goes out heads off the usual negotiation failure: a candidate asks for another £2,000 and hears a flat refusal, without either side saying out loud that the request costs the business £2,300.00 once secondary contributions are added, while landing in the candidate’s bank account as materially less than £2,000.
Benefits in kind and Class 1A. Company cars, private medical cover and other reportable benefits attract Class 1A at 15% — the same rate as cash pay, so a benefits-heavy package carries no National Insurance advantage for the employer. Class 1A is reported on form P11D(b) after the tax year rather than through payroll, which is why it often gets left out of a cost-of-hire estimate entirely.
Salary against dividends for owner-managers. With secondary contributions starting at £5,000 rather than the old £9,100, the arithmetic of the optimal director salary changed in April 2025 and changed again when dividend rates rose for 2026/27. The dividend tax calculator covers the distribution side of that decision.
The apprenticeship levy and the wider pay bill. Above a £3,000,000 pay bill the levy adds 0.5% of everything subject to employer Class 1, less a £15,000 allowance shared across connected companies. Levy payers get the money back as digital funds for approved apprenticeship training, so for a business that trains, it is closer to a restricted budget than a tax.
Questions
Frequently asked questions
How much is employer National Insurance in 2026/27?
Employers pay Class 1 secondary National Insurance at 15% on each employee's earnings above the Secondary Threshold of £5,000 a year (£96 a week, £417 a month). On a £30,000 salary that is £3,750.00 for the year, on top of the salary itself. It is a cost to the business rather than a deduction from the employee, so it never appears on their payslip: you report it on the Full Payment Submission each pay run and pay it over with PAYE alongside income tax and the employee's own contributions. Because it is an employment cost it is deductible against Corporation Tax, so the net cost to a profitable company is lower than the headline figure. The rate rose from 13.8% and the threshold fell from £9,100 on 6 April 2025, so the same salary cost £2,884.20 in 2024/25 — about 23% less. HMRC publishes the figures in its rates and thresholds guidance for employers.
Is there an upper limit on employer National Insurance?
No. Employer National Insurance is uncapped. Employee National Insurance falls from 8% to 2% above the Upper Earnings Limit of £50,270, but the employer's 15% applies to every pound above £5,000, however much the employee earns. A £100,000 salary costs the employer £14,250.00 in secondary contributions. This is the single most common budgeting mistake when costing senior appointments, because most people learn the employee rate table first and assume the employer's mirrors it. The practical consequence is that a pay rise never gets cheaper with seniority: every extra £1,000 of salary costs another £150 in secondary contributions whether it is awarded on £25,000 or on £250,000, so the real price of a £1,000 rise is £1,150 before any pension on top.
Can I claim the £10,500 Employment Allowance?
Most businesses and charities can, provided less than half their work is in the public sector. The allowance offsets your total secondary Class 1 liability, drawn down each payroll run until the £10,500 is gone or the tax year ends. Two exclusions catch people out: a company whose only employee liable for secondary Class 1 is its single director cannot claim, and where companies or charities are connected only one of them may claim. You claim it by putting "Yes" in the Employment Allowance indicator field on an Employer Payment Summary (EPS), through your payroll software or HMRC's Basic PAYE Tools. The claim does not roll over automatically — it has to be made again each tax year — and if you stop it before 5 April, HMRC removes the allowance already given for that year.
Does the £100,000 cap still stop me claiming Employment Allowance?
No. That restriction was removed from April 2025. gov.uk now states that employers paying more than £100,000 in Class 1 National Insurance liabilities can apply for the Employment Allowance, where previously a business over that threshold in the previous tax year was shut out entirely. A great deal of guidance written before 2025 still repeats the old rule, so if a calculator or an article tells you that you are too large to claim, check the date on it. The de minimis state aid limits that apply to some sectors are a separate test and still stand.
Do I pay employer NI for an employee over State Pension age?
Yes, in full. Category C stops the employee's own contribution but leaves the employer paying 15% above the Secondary Threshold exactly as for category A. An employee over State Pension age on £30,000 still costs you £3,750.00 in secondary contributions. The employee needs to show proof of age so you can apply the right category letter, and getting it wrong costs them money rather than you — which is why it tends to go unnoticed until a payslip query.
Do I pay employer NI for an apprentice or someone under 21?
Not up to £50,270. Category M (under 21), category H (apprentice under 25 on an approved UK scheme) and category V (a veteran in their first civilian job) all carry a 0% employer rate between the Secondary Threshold and the Upper Secondary Threshold. Above £50,270 the normal 15% resumes. So a £22,000 apprentice costs nothing in employer NI, while an under-21 on £60,000 costs £1,459.50. The employee's own contribution is unaffected by any of these letters.
How is directors’ National Insurance worked out for the employer?
Directors have an annual earnings period, so thresholds are applied to the year rather than to each pay run. Payroll can either charge nothing until the cumulative pay passes the threshold, or use the alternative method of ordinary period-by-period deductions with a reconciliation in the final period of the year. Both arrive at the same annual total for a level salary, which is why the annual figure shown here is the right one to budget from. Where a director is appointed part-way through the year, the thresholds are pro-rated by the number of remaining tax weeks — HMRC booklet CA44 sets out the arithmetic.
What does an employee actually cost beyond their salary?
Salary, plus employer National Insurance, plus the automatic enrolment employer pension minimum, plus the Apprenticeship Levy if your pay bill exceeds £3,000,000. On a £30,000 salary with no Employment Allowance left, that is £3,750.00 of NI and £712.80 of pension for a true cost of £34,462.80 — about 14.9% on top. The percentage is not constant across salaries: because pension is charged on a capped band while National Insurance is not, the on-cost is heaviest in the middle of the pay scale and drifts down again on senior salaries. Equipment, employer's liability insurance, recruitment fees, holiday cover and any benefits in kind sit on top of that and are outside the statutory calculation.
How much employer pension do I have to pay?
At least 3% of qualifying earnings, as part of an 8% total minimum that the employee makes up. Qualifying earnings are the slice of pay between £6,240 and £50,270, so on £30,000 the employer minimum is £712.80 rather than £900. Both the earnings band and the £10,000 automatic enrolment trigger are frozen for 2026/27 at their 2025/26 values, per the DWP review published in December 2025. If your scheme uses basic pay or total earnings instead of qualifying earnings it must be certified as at least as good.
Do I have to pay the Apprenticeship Levy?
Only if your annual pay bill is more than £3,000,000. The levy is 0.5% of the pay bill less a £15,000 annual allowance, so a £4,000,000 pay bill produces £5,000.00 for the year, reported and paid monthly through PAYE. Connected companies and charities share a single allowance between them and must decide at the start of the tax year how to split it. The pay bill is all earnings subject to employer Class 1, including pay for under-21s and apprentices on which no NI is actually charged.
How can I legitimately reduce my employer NI bill?
Claim the Employment Allowance if you are eligible — that is up to £10,500 a year and the single largest lever for a small employer. Pension salary sacrifice is the next largest: reducing contractual pay in exchange for an employer pension contribution takes the sacrificed amount out of NI-able earnings entirely, saving £150 of employer NI per £1,000 sacrificed at the current rate. Then check category letters, because under-21, apprentice, veteran and Freeport or Investment Zone reliefs are routinely missed. Note that from 6 April 2029 only the first £2,000 sacrificed each year keeps its NI exemption.
When does employer National Insurance have to be paid to HMRC?
Through PAYE, alongside income tax and employee National Insurance. Electronic payments must clear by the 22nd of the following tax month; if you pay by post the deadline is the 19th. Employers expecting to pay less than £1,500 a month on average can arrange to pay quarterly instead. Class 1A on benefits in kind runs on a separate timetable — it is reported on form P11D(b) by 6 July after the tax year and paid by 22 July, and it is charged at the same 15% rate as secondary Class 1.
Authoritative sources
- HM Revenue & Customs — Rates and thresholds for employers 2026 to 2027
The statutory source for the 15% secondary rate, the £5,000 Secondary Threshold, both upper secondary thresholds, the category letter table, Class 1A and Class 1B. Page last updated 5 June 2026.
- HM Revenue & Customs — Employment Allowance: eligibility
The single-director exclusion in HMRC’s own words, the public-sector test, the connected-companies rule, and confirmation that the £100,000 restriction was removed from April 2025.
- HM Revenue & Customs — National Insurance category letters
The definitive mapping of each letter to the group of employees it covers, used for the category selector and the comparison table on this page.
- Department for Work and Pensions — Automatic enrolment thresholds review for 2026/27
Confirms the £10,000 earnings trigger and the £6,240–£50,270 qualifying earnings band are held at their 2025/26 values. Published 18 December 2025.
- HM Revenue & Customs — Pay Apprenticeship Levy
The 0.5% rate, the £15,000 allowance, what counts as the pay bill, and how connected companies share one allowance.
- HM Revenue & Customs — CA44: National Insurance for company directors
The 2026/27 edition, effective 6 April 2026 to 5 April 2027, covering the directors’ annual earnings period and the alternative method for irregular pay.
Important disclaimer
This calculator produces estimates for the 2026/27 tax year using published HMRC and DWP figures, worked on an annual basis. It is information, not regulated tax or financial advice. Real payroll assesses National Insurance for each pay period, so a monthly-paid employee’s total for the year can differ by a few pounds from the annual calculation shown here, and directors are assessed on an annual earnings period with its own rules for mid-year appointments. The tool does not model Class 1A on benefits in kind, statutory payments and the recovery available on them, off-payroll working rules, or employer’s liability insurance and other non-statutory costs. Employment Allowance eligibility depends on facts this page cannot see. Check your position with your accountant or against gov.uk before relying on a figure for a filing or a budget.
Published by Kalcify · Last updated
Calculators are built against primary sources — government tax authorities (IRS, HMRC, CRA, ATO) for finance and the World Health Organization for health metrics. Updated when rates or rules change. View methodology and data sources.
Related Tools
More free calculators and tools you might find useful