- Rate: 15% employer (secondary) Class 1 NI on earnings above the secondary threshold1.
- Secondary threshold: £5,000 a year — £96 a week or £417 a month1. No upper earnings limit: 15% continues on every pound above it.
- Formula: employer NI = (gross annual pay − £5,000) × 15%. Example: £35,000 → £4,500 a year, £375 a month.
- 0% rates: employees under 21, apprentices under 25 and armed-forces veterans in their first year of civilian work are NI-free to the employer up to £50,270 a year (category letters M, H and V)2.
- Employment Allowance: up to £10,500 off the annual employer NI bill for eligible employers3.
- Class 1A NI on benefits in kind (company cars, private medical) is also 15%1.
The 2026/27 employer NI rate and how to calculate it
Employers pay secondary Class 1 National Insurance at 15% on each employee's earnings above the secondary threshold of £5,000 a year1. The threshold is applied per pay period — £96 for weekly paid staff, £417 for monthly — so an employee paid £2,500 a month generates (£2,500 − £417) × 15% = £312.45 of employer NI that month. There is no ceiling: unlike employee NI, which drops to 2% above £50,270, the employer rate stays at 15% however high the salary.
Both figures have applied since 6 April 2025, when the rate rose from 13.8% and the threshold fell from £9,100, and they are unchanged for 2026/27. Employer NI is paid to HMRC with PAYE by the 22nd of the following month (19th if paying by post), and is reported on each Full Payment Submission. It is a cost on top of gross salary — it never appears as a deduction on the employee's payslip.
The same 15% rate applies to Class 1A NI on most benefits in kind and to Class 1B NI on PAYE Settlement Agreements1. Employer NI is not charged on employer pension contributions, which is why salary sacrifice pension arrangements save the employer 15% of every pound sacrificed.
Worked examples: employer NI at £25,000, £35,000 and £50,000
Three salaries, worked from the formula. The final two columns add the minimum 3% auto-enrolment pension on qualifying earnings (£6,240 to £50,270)4 to show the mandatory cost above salary.
| Gross salary | NI-able pay (salary − £5,000) | Employer NI a year | A month | Min. pension (3%) | Total employer cost |
|---|---|---|---|---|---|
| £25,000 | £20,000 | £3,000 | £250.00 | £562.80 | £28,562.80 |
| £35,000 | £30,000 | £4,500 | £375.00 | £862.80 | £40,362.80 |
| £50,000 | £45,000 | £6,750 | £562.50 | £1,312.80 | £58,062.80 |
£25,000: (£25,000 − £5,000) × 15% = £3,000. Pension: (£25,000 − £6,240) × 3% = £562.80. Add Employment Allowance, overheads or a higher pension rate in the full calculator.
Employer NI by salary, 2026/27
A quick-reference ladder for budgeting. Every row is (salary − £5,000) × 15%; open the salary pages for the monthly and total-cost breakdowns.
| Salary | Employer NI a year | A month | NI as % of salary |
|---|---|---|---|
| £20,000 | £2,250 | £187.50 | 11.3% |
| £24,784.50 (NLW full-time) | £2,967.68 | £247.31 | 12.0% |
| £30,000 | £3,750 | £312.50 | 12.5% |
| £40,000 | £5,250 | £437.50 | 13.1% |
| £45,000 | £6,000 | £500.00 | 13.3% |
| £60,000 | £8,250 | £687.50 | 13.8% |
| £75,000 | £10,500 | £875.00 | 14.0% |
| £100,000 | £14,250 | £1,187.50 | 14.3% |
The effective rate rises with salary because the £5,000 threshold is a smaller share of a bigger salary; it approaches 15% but never reaches it.
What changed in April 2025 — and what it cost
Before 6 April 2025 employer NI was 13.8% on earnings above £9,100. The move to 15% above £5,000 raised the bill on every salary, and proportionally most on lower pay because the threshold cut adds £615 of NI (£4,100 × 15%) before the rate rise even applies1. Employment Allowance was doubled to £10,500 at the same time to soften the impact for small employers3.
| Salary | Old rules (13.8% above £9,100) | Current rules (15% above £5,000) | Extra employer NI a year |
|---|---|---|---|
| £25,000 | £2,194.20 | £3,000.00 | +£805.80 (+37%) |
| £35,000 | £3,574.20 | £4,500.00 | +£925.80 (+26%) |
| £50,000 | £5,644.20 | £6,750.00 | +£1,105.80 (+20%) |
| £100,000 | £12,544.20 | £14,250.00 | +£1,705.80 (+14%) |
Old rules: (salary − £9,100) × 13.8%. The change took effect on 6 April 2025 and continues unchanged through 2026/27.
Employment Allowance and the 0% categories
Employment Allowance lets eligible employers reduce their employer NI bill by up to £10,500 in 2026/273. It is claimed through an Employer Payment Summary in payroll software and used up pay period by pay period from April. A company needs at least one employee — or two directors — paid above £5,000 to qualify; a company whose only person above the threshold is a single director cannot claim. Two employees on £30,000 generate £7,500 of employer NI, so the allowance wipes the bill entirely; six employees on £35,000 generate £27,000, of which £16,500 remains payable after the allowance.
Some employees carry a 0% employer rate up to an upper secondary threshold of £50,270: anyone under 21 (category M), apprentices under 25 on an approved apprenticeship (category H), and armed-forces veterans in their first 12 months of civilian employment (category V)2. Above £50,270 the standard 15% applies to the excess. Employees working in a designated Freeport or Investment Zone tax site can qualify for 0% up to £25,000 for 36 months (categories F, I, S, L for Freeports; N, E, K, D for Investment Zones)2. Applying the right category letter is the employer's job — payroll software will not correct a mis-set letter.
Employer NI is also charged on earnings from directors, but on an annual basis: a director's £5,000 threshold applies to the whole tax year rather than each pay period, which is why a director paid an irregular bonus in one month is assessed cumulatively. Employer NI does not apply to genuinely self-employed contractors, to dividends, or to employer pension contributions.
Common mistakes
Payroll reviews turn up the same errors repeatedly:
- Using the pre-April-2025 threshold of £9,100 or rate of 13.8% in spreadsheets and offer-letter costings — understating each hire by £800 to £1,700 a year1.
- Assuming employer NI tapers above £50,270 like employee NI. It does not; it is 15% all the way up.
- Leaving an under-21 or apprentice on category A and paying 15% NI that is not due2 — or, the reverse, leaving them on M or H after their 21st or 25th birthday.
- Claiming Employment Allowance as a single-director company, or in two connected companies at once3.
- Quoting employer NI as the whole on-cost. Add the 3% minimum pension (and holiday cover for hourly staff) for the true cost of employing someone.
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