Does Employment Allowance reduce employer NI?

Yes. Eligible employers can offset up to £10,500 of annual employer NI in 2025/26.

Is this calculator financial or legal advice?

No. It provides estimates only, based on stated assumptions.

UK Employer Calculator 2025/26 — NI, Hiring Costs & Payroll Tools

Q: What is the employer NI rate for 2025/26?

For 2025/26, the standard employer NI rate is 15% on earnings above the £5,000 secondary threshold.

Item	Annual
Gross salary	£35,000
Employer NI	£4,500
Employer pension (3%)	£863
Overheads	£3,000
Total employer cost	£43,363

Earnings band	Rate	NI due
£0 - £5,000	0%	£0
Above £5,000	15.0%	£4,500

Calculators

All employer calculators

12 live tools covering employer cost, payroll obligations and HR calculations. All updated for 2025/26 rates.

Employer NI & Total Cost

Salary + NI at 15% + pension + overheads. Full employer cost with band breakdown for 2025/26.

Employer NI by Salary

Ready-made NI calculations at 48 salary levels. Shareable pages updated for the April 2025 rate change.

Holiday Entitlement

Statutory and contractual holiday for full-time, part-time and mid-year starters.

Redundancy Pay

Statutory redundancy by age, service years and weekly pay. Includes PILON and tax treatment.

Statutory Maternity Pay

6-week higher rate + 33-week lower rate. Employer cost and SMP recovery.

Notice Period

Statutory vs contractual notice, exact end dates, and payment in lieu of notice.

Settlement Agreement

Estimate settlement value including notice, redundancy, compensatory amounts and tax treatment.

Pro Rata Salary

Convert full-time salary to part-time equivalent by days or hours per week.

Statutory Sick Pay

SSP eligibility, waiting days, weekly amounts and duration for 2025/26.

Employer Pension Cost

Auto-enrolment costs on qualifying earnings. Employer minimum, total minimum and opt-out rates.

Bradford Factor

Absence scoring for HR teams. Input episodes and days to calculate Bradford Factor score.

Unfair Dismissal Compensation

Basic award + compensatory award estimates. Updated for Employment Rights Act 2025 changes.

Cost pages

Employer cost by salary

Pre-calculated employer cost at every salary level — NI, pension and total cost. Updated for 2025/26.

£20,000 £25,000 £28,000 £30,000 £32,000 £35,000 £38,000 £40,000 £45,000 £50,000 £60,000 £75,000 £100,000 £150,000

See all 48 salary levels →

Employer NI on specific salaries

NI on £20k NI on £25k NI on £30k NI on £35k NI on £40k NI on £45k NI on £50k NI on £60k NI on £75k NI on £100k

See all NI calculations →

Guides

Employer guides

Practical guides for UK employers and HR teams. Written for decision-making, not theory.

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Employer NI

Employer NI increase April 2025 — what changed and what it costs

15% rate, £5,000 threshold, Employment Allowance increase. Impact on your payroll.

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Hiring

The true cost of hiring an employee in the UK (2025/26)

Beyond salary: NI, pension, recruitment, onboarding, equipment and hidden costs.

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Tax relief

Employment Allowance 2025/26 — eligibility, claiming and examples

£10,500 maximum. Who qualifies, how to claim, and common mistakes.

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Pensions

Auto-enrolment pension costs for employers explained

Minimum contributions, qualifying earnings, opt-out rates and cost modelling.

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Redundancy

Redundancy process and costs — employer guide

Statutory pay, consultation requirements, notice periods and settlement alternatives.

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Legislation

Employment Rights Act 2025 — what employers need to know

Day-one rights, unfair dismissal changes, zero-hours reforms and implementation timeline.

Frequently asked questions

What is the employer NI rate for 2025/26?

Employers pay 15% National Insurance on employee earnings above the secondary threshold of £5,000 per year (£96 per week, £416 per month). This rate increased from 13.8% in April 2025, and the threshold was reduced from £9,100 to £5,000 at the same time. The combined effect means significantly higher employer costs, particularly for lower-paid employees where the threshold reduction has proportionally more impact.

What is Employment Allowance and can I claim it?

Employment Allowance lets eligible employers reduce their annual employer NI bill by up to £10,500 for 2025/26. This was increased from £5,000 in 2024/25. The previous £100,000 eligibility cap has been removed, so more businesses can now claim. However, companies with only one employee who is also a director cannot claim. You apply through your payroll software by ticking the Employment Allowance indicator on your Employer Payment Summary.

How much does it really cost to employ someone on £35,000?

On a £35,000 salary, expect to pay approximately £4,500 in employer NI (15% on earnings above £5,000), plus around £863 in auto-enrolment pension contributions (3% on qualifying earnings of £28,760), plus workplace overheads typically £2,000–£5,000. Total cost is usually £41,000–£44,000 per year — roughly 17–26% above the headline salary. Use the calculator above with your specific figures to get a precise estimate.

How is employer NI calculated?

Employer NI is charged at 15% on all employee earnings above the secondary threshold of £5,000 per year. There is no upper earnings limit for employer NI — unlike employee NI, which drops to 2% above £50,270, employers continue to pay 15% on all earnings above the threshold with no cap. Reduced rates apply for employees under 21 and apprentices under 25 (0% up to the upper secondary threshold of £50,270).

What changed in April 2025 for employer costs?

Three changes took effect from 6 April 2025: the employer NI rate increased from 13.8% to 15%, the secondary threshold was cut from £9,100 to £5,000, and Employment Allowance rose from £5,000 to £10,500 (with the £100,000 eligibility cap removed). For an employee on £30,000, annual employer NI went from approximately £2,884 to £3,750 — an increase of about £866 per year. Smaller employers who can claim Employment Allowance may offset some or all of this increase.

Calculator suite