Employer NI Calculator

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.

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.

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.

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.

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.

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.

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, as of 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.

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.

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.