Guide
Employer NI Changes April 2025 — Rate Up to 15%, Threshold Down to £5,000
Written by EmployerCalculator Editorial · Reviewed against official UK sources · Last updated: April 2026
From April 2025, employer NI rises from 13.8% to 15% and the secondary threshold drops from £9,100 to £5,000/year. See what this means for your payroll costs.
Employer NI 2026/27: the exact rule changes from 6 April 2025
If you searched for an NI rise calculator, these are the two numbers that matter for 2026/27: employer Class 1 NI is now 15% (up from 13.8%), and the secondary threshold is now £5,000 (down from £9,100). Both changes started on 6 April 2025 and apply to standard employer NI calculations.
Those two changes compound each other. A higher rate means each NIable pound costs more, and a lower threshold means more salary is NIable in the first place. This is why many employers saw a larger payroll cost increase than expected, even before pension, benefits, or recruitment overheads were added.
The policy package also increased Employment Allowance from £5,000 to £10,500 and removed the previous £100,000 eligibility cap. That relief is meaningful for eligible employers, but it does not reverse the structural NI rise for every business. Your net outcome depends on payroll size and whether allowance can be fully used.
What the NI rise costs by salary: practical worked examples
At £30,000 salary, 2026/27 employer NI is approximately £3,750. Under 2024/25 rules, the equivalent NI was about £2,884. That is a rise of roughly £866 per employee per year. At £35,000, NI rises from about £3,575 to £4,500, adding around £915. At £40,000, NI moves from around £4,264 to £5,250, adding around £986.
At £50,000 salary, 2026/27 employer NI is around £6,750 compared with about £5,644 under 2024/25 assumptions, a rise near £1,106. At £75,000 salary, NI is around £10,500 versus about £9,094, adding around £1,406. At £100,000 salary, NI is around £14,250 versus about £12,544, adding around £1,706.
The pattern is simple: NI rise per employee generally grows with salary, but lower and mid salaries still face material absolute increases because the threshold fell sharply. For budgeting, run your actual salary mix instead of a single midpoint. A team with many £28k–£38k roles can see significant aggregate impact.
From NI-only to true employer cost: what to include in decisions
NI is only one layer of recurring cost. For realistic hiring decisions, combine salary, employer NI, minimum pension, and your operational overhead assumptions. A £35,000 role can move from a headline salary to a total employer cost in the low-£40k range once statutory and operational components are included.
Auto-enrolment pension is usually modelled at a minimum employer contribution of 3% on qualifying earnings between £6,240 and £50,270. Above £50,270, pension qualifying earnings stop increasing for statutory minimum purposes, but employer NI continues with no upper cap. That shifts the cost mix as salaries rise.
Use monthly-first outputs for approvals and cashflow planning. Managers, finance teams, and founders usually decide faster with a clear monthly number plus annual total. If your process is still gross-salary-first, payroll pressure tends to appear late in the quarter when commitments are already made.
How to use this as an NI rise calculator in practice
Step 1: model the role at current 2026/27 settings (15% above £5,000). Step 2: compare against 2024/25 baseline logic (13.8% above £9,100). Step 3: add pension and overhead assumptions. This gives a clean year-on-year variance you can use in budget notes, board packs, and offer sign-off.
Step 4: run the same salary with and without Employment Allowance where relevant. For eligible small employers, allowance can materially reduce net NI payable in-year. For larger payrolls, allowance may only offset an early part of annual liability, so do not assume the relief eliminates NI rise impact.
Step 5: document assumptions in plain English: tax year, threshold, NI rate, pension basis, allowance treatment, and overhead rule. Most reporting disputes come from assumption mismatch rather than calculation errors. A documented assumptions line makes finance, HR, and payroll conversations materially faster.
Common mistakes to avoid in 2026/27 employer NI planning
Mistake one is using old thresholds in spreadsheets or offer calculators. A model still using £9,100 as secondary threshold will understate NI in 2026/27. Mistake two is quoting NI-only cost to hiring managers without pension and overheads, which causes recurring under-budgeting across multiple hires.
Mistake three is treating Employment Allowance as automatic. Eligibility still matters, and some company structures are excluded. Mistake four is assuming NI behaves like employee NI with an upper-rate reduction. Employer NI does not taper at higher salaries; 15% continues above threshold with no upper limit.
Mistake five is not refreshing planning pages in search and internal docs. If your team searches terms like “employer ni calculator 2026/27” or “ni rise calculator”, make sure they land on updated, assumption-led pages. Good decisions come from current-year inputs, consistent assumptions, and clear monthly outputs.
Use the calculator
Put the figures from this guide into practice with the live calculator tools below.
Frequently asked questions
How much does it cost to employ someone in the UK?
The true cost to employ someone in the UK is typically 15–20% above gross salary. At £30,000: employer NI £3,750 + pension £713 = approximately £34,463 per year. At £50,000: employer NI £6,750 + pension £1,313 = approximately £58,063 per year. Adding workplace overheads of £2,000–£5,000 can bring the total to 20–25% above the headline salary.
What is the employer NI rate for 2026/27?
For 2026/27, employer Class 1 National Insurance is charged at 15% 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, when the threshold was simultaneously cut from £9,100 to £5,000. Both changes apply from 6 April 2025.
How much employer NI do I pay on a £35,000 salary?
At £35,000 salary, employer NI for 2026/27 is £4,500 per year — 15% on £30,000 of earnings above the £5,000 threshold. That is £375 per month. In 2024/25, the same salary produced £3,585 in employer NI. The April 2025 changes therefore add £915 per year on this salary alone.
What is Employment Allowance and who can claim it?
Employment Allowance lets eligible employers reduce their annual employer NI bill by up to £10,500 in 2026/27, increased from £5,000 in 2024/25. The previous £100,000 NI bill eligibility cap has been removed, so more businesses qualify. Companies where the only paid employee is also a director cannot claim. Apply through payroll software via the Employer Payment Summary indicator.
What is the total employer cost above salary?
Beyond salary, employer cost includes: employer NI (15% on earnings above £5,000), employer pension (minimum 3% of qualifying earnings between £6,240 and £50,270), and overheads such as equipment, software and workspace. For most UK salaries this adds 12–20% above headline pay. Use the inputs above to set your exact pension rate and overhead figure.
What changed for employers in April 2025?
Three changes took effect from 6 April 2025: the employer NI rate rose from 13.8% to 15%, the secondary threshold was cut from £9,100 to £5,000, and Employment Allowance increased from £5,000 to £10,500 with the eligibility cap removed. For a £30,000 salary, annual employer NI increased from approximately £2,884 to £3,750 — a rise of £866 per year.
How is employer NI different from employee NI?
Employer NI is a cost paid by the employer on top of gross salary — it does not reduce take-home pay. Employee NI is deducted from the employee's wages instead. For 2026/27, employees pay 8% on earnings between £12,570 and £50,270, then 2% above that. Employers pay 15% on all earnings above £5,000 with no upper cap. This calculator covers the employer side; for employee take-home pay see AfterTaxSalary.co.uk.
What are employer costs in the UK?
UK employer costs in 2026/27 are: gross salary, employer NI at 15% on earnings above £5,000, employer pension at minimum 3% of qualifying earnings (£6,240–£50,270), and any operational overheads such as equipment or software. For a £35,000 salary, statutory employer costs (NI + pension) add approximately £5,363/year before overheads.
How much do I cost my employer in the UK?
If you earn £35,000, you cost your employer roughly £40,363/year — your salary plus £4,500 employer NI and £863 minimum pension. At £50,000, the total is approximately £58,063. Your employer pays these on top of your salary; they are not deducted from your pay. Use this calculator to see the exact figure for your salary.
Is this a PAYE cost calculator for employers?
Yes. PAYE employer costs include employer NI — calculated at 15% above £5,000 for 2026/27 — plus the employer's auto-enrolment pension contribution. The full calculator models both alongside any overhead assumptions to give a total PAYE-basis employer spend per employee.
What is a cost to company (CTC) salary in the UK?
Cost to company (CTC) in the UK refers to the total annual cost of an employee to their employer — salary, employer NI, pension, and overheads combined. A £35,000 CTC salary typically means a gross salary of roughly £30,000–£32,000 once the employer's NI and pension obligations are included in the total. Use this calculator to work backwards from a CTC budget to a gross salary.
Once you know the cost — what next?
Running payroll correctly after you have calculated employer cost is the next practical step. The tools below handle HMRC RTI submissions, auto-enrolment pension and payslip generation automatically.