Employer National Insurance Contributions Calculator UK 2026
2026 Tax Year: Employer NI rate is 15% on earnings above £5,000/year (£96.15/week, £416.67/month). Employment Allowance: up to £10,500/year for eligible employers.
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Employer NIC Breakdown
What is an Employer's National Insurance?
Employer’s National Insurance (NI) is a mandatory payroll tax that UK businesses pay to HMRC on top of their employees’ wages. It is separate from the National Insurance deducted from employees’ own pay. As an employer, you are responsible for calculating and paying this contribution every time you run payroll.
Employer NI falls under Class 1 secondary contributions for the majority of workers on PAYE. The amount you pay depends on how much each employee earns above a set earnings threshold, known as the secondary threshold, which for the 2026 tax year stands at £5,000 per year (£96 per week / £417 per month).
For the 2026 tax year, the employer NI rate is 15%, increased from 13.8% in 2024–25. This change was announced in the Autumn Budget 2024 and took effect from 6 April 2025. Alongside the rate rise, the secondary threshold was also reduced from £9,100 to £5,000, meaning employers now begin paying NI contributions on a wider portion of each employee’s earnings.
One important relief available to eligible businesses is Employment Allowance, which rose to £10,500 for 2026. This allows qualifying employers to reduce their annual employer NI bill by up to £10,500. The previous £100,000 NI liability cap on eligibility has also been removed, meaning more businesses can now claim it.
In short, employer NI is not optional, it is a legal obligation tied to running a payroll in the UK. Whether you employ one person or one hundred, getting your calculations right matters both for compliance and for managing your business costs accurately.
How Does an Employer NI Calculator Work?
An employer NI calculator takes the information you provide about your employee’s pay and applies the current HMRC rates and thresholds to give you an accurate liability figure. Here is how the process works step by step.
Step 1: Enter the employee’s gross salary. You input the annual, monthly, or weekly gross pay of the employee. This should include any regular overtime, commission, or bonuses if they are paid regularly through payroll.
Step 2: The calculator applies the secondary threshold. For 2026, the secondary threshold is £5,000 per year. Any earnings below this point are not subject to employer NI. The calculator automatically subtracts this from the gross salary to find the liable earnings.
Step 3: The rate is applied. The current employer NI rate of 15% is then applied to the earnings above the secondary threshold. For example, if your employee earns £30,000 per year, the liable portion is £30,000 minus £5,000, which equals £25,000. At 15%, the employer NI due would be £3,750 per year, or £312.50 per month.
Step 4: The result is broken down. A good calculator shows your NI liability broken down by year, month, week, and day, making it easier to budget and plan payroll costs accurately.
A note on benefits and bonuses: If your employee receives taxable benefits in kind (such as a company car or private medical cover), these are handled separately under Class 1A contributions, also at 15% for 2025–26. You would report and pay Class 1A at the end of the tax year via a P11D or through your payroll.
Our Employer National Insurance Contributions Calculator on this page handles all of this automatically. You simply enter the salary figure, select the tax year, and get an instant, accurate breakdown of your employer NI liability.
Types of National Insurance Contributions
National Insurance contributions in the UK are split into several classes, and employers are responsible for more than one of them depending on how they pay and reward their staff. Here is a clear breakdown of each type relevant to employers.
Class 1 (Primary) – Employee Contributions These are deducted directly from an employee’s wages by the employer through PAYE. The employee pays 8% on earnings between £12,570 and £50,270 per year, and 2% on anything above that. As an employer, you are responsible for deducting the correct amount and sending it to HMRC, but you do not bear the cost yourself; it comes from the employee’s pay.
Class 1 (Secondary) – Employer Contributions This is the main employer NI cost. You pay 15% on each employee’s earnings above the secondary threshold of £5,000 per year (2026). This comes entirely out of your business, it is not deducted from the employee’s pay. It is an additional cost on top of the gross salary you pay.
Class 1A – Employer Contributions on Benefits in Kind If you provide employees with taxable benefits, such as a company car, private health insurance, or a mobile phone for personal use, you pay Class 1A NI on the taxable value of those benefits. The Class 1A rate for 2026 is also 15%. These contributions are reported and paid at the end of the tax year through a P11D submission (or via payroll if you have payrolled benefits).
Class 1B – Employer Contributions on PAYE Settlement Agreements If your business has entered into a PAYE Settlement Agreement (PSA) with HMRC, which allows you to make a single annual payment covering tax and NI on minor or irregular employee benefits, you pay Class 1B contributions. The Class 1B rate for 2026 is also 15%, payable by 22 October following the end of the relevant tax year.
Class 2 and Class 4 – Self-Employed Contributions These are not employer contributions. Class 2 has now been abolished from April 2025. Class 4 remains for self-employed individuals and is paid through Self Assessment on profits above the lower profits limit.
Understanding which class applies to each type of payment or benefit you provide is essential for staying compliant with HMRC.
What Are Employer Class 1 National Insurance Rates?
Class 1 secondary contributions are what most people mean when they talk about employer NI. You pay them on your employees’ earnings above the secondary threshold. Below is a full rate and threshold reference for recent tax years.
2026 (Current Tax Year)
Threshold | Weekly | Monthly | Annual |
Secondary Threshold (employer NI starts) | £96 | £417 | £5,000 |
Upper Secondary Threshold (under 21s / apprentices under 25) | £967 | £4,189 | £50,270 |
Employer NI rate: 15% on earnings above the secondary threshold for most employees.
For employees under the age of 21 and apprentices under the age of 25, the rate is 0% on earnings up to the Upper Secondary Threshold of £50,270 per year. Above this point, the standard 15% rate applies.
Historical Rates at a Glance
Tax Year | Rate | Secondary Threshold (Annual) |
2026 | 15% | £5,000 |
2024–25 | 13.8% | £9,100 |
2023–24 | 13.8% | £9,100 |
2022–23 | 13.8% | £9,100 |
2021–22 | 13.8% | £8,840 |
2020–21 | 13.8% | £8,788 |
The change from 13.8% to 15% in April 2025, combined with the threshold dropping from £9,100 to £5,000, represents the most significant shift in employer NI costs in a decade. For a business with a single employee earning £30,000, this change alone adds over £1,000 per year to employer costs when compared to 2024–25 figures.
Worked Example – 2026: Employee annual salary: £28,000 Earnings above secondary threshold: £28,000 − £5,000 = £23,000 Employer NI: £23,000 × 15% = £3,450 per year / £287.50 per month
When Do I Have to Pay National Insurance?
Employer NI payments are tied to your payroll cycle and your PAYE payment schedule with HMRC. Here is what you need to know about the timing.
If you run monthly payroll, employer NI is calculated every time you pay your employees and must be paid to HMRC by the 22nd of the following month (or 19th if paying by post). For example, the NI due for April 2025 payroll must reach HMRC by 22 May 2025.
If you run weekly payroll, the same rule applies, contributions are due by the 22nd of the month following the end of each tax month, which runs from the 6th to the 5th of each calendar month.
If you use payroll software, your NI liability will be calculated automatically each time you process a pay run. Modern payroll software applies the current HMRC rates and thresholds and submits a Real Time Information (RTI) return to HMRC at the same time, keeping you compliant without manual intervention.
If you are a sole trader or run your own limited company, and you pay yourself through PAYE as a director, your employer NI is also calculated on your salary above the secondary threshold. Many micro business owners structure their salary below £5,000 per year to avoid triggering employer NI altogether, then top up their income through dividends, though this requires careful planning around pension entitlement and other employment rights.
Important: You must not delay payment. Late payment of PAYE and NI attracts interest and penalties from HMRC. If you are consistently late, HMRC may issue a penalty notice or open a compliance check.
There is no minimum number of employees that triggers the obligation to pay employer NI. As soon as you employ even one person whose earnings exceed the secondary threshold of £5,000 per year, you are liable.
How to Inform HMRC About Your Expenses and Benefits?
When you provide employees with taxable expenses or benefits, things like a company car, private healthcare, gym membership, or interest-free loans, you are generally required to report these to HMRC and pay employer NI on their value. Here is how the reporting works in practice.
Option 1: Payrolling Benefits Since April 2016, HMRC has allowed employers to report and tax most benefits in kind through payroll in real time, rather than waiting until the end of the tax year. If you have registered with HMRC to payroll your benefits, the taxable value of the benefit is added to the employee’s gross pay each pay period, tax is applied through PAYE, and Class 1A NI is also calculated at that point. This removes the need for a P11D for those benefits.
Option 2: Submitting a P11D If you have not payrolled your benefits, you must submit a P11D form to HMRC for each employee who received taxable expenses or benefits during the tax year. The deadline for P11D submissions is 6 July following the end of the tax year. You must also submit a P11D(b) form, which summarises your total Class 1A NI liability, and pay the Class 1A NI due by 22 July (or 19 July if paying by cheque).
HMRC-Approved Scale Rates Instead of calculating the actual cost of every expense (such as subsistence or mileage), employers can use HMRC-approved scale rates or benchmark rates. For example, HMRC publishes Advisory Fuel Rates for company cars that are updated quarterly. Using these approved rates removes the need to report individual expense payments to HMRC, as long as the rates are not exceeded.
Employer-Agreed Rates You can also apply to HMRC for bespoke scale rates if the standard HMRC rates do not reflect your employees’ actual costs. Once agreed in writing, these rates can be used without triggering a P11D obligation, though they must be reviewed and renewed every five years.
If you are unsure whether a specific benefit or expense is exempt from NI or reportable, HMRC’s Employer Bulletin and the GOV.UK guidance on expenses and benefits are the best starting points. Getting this wrong can lead to underpayment of NI and potential penalties on inspection.
What Is a PAYE Settlement Agreement in Terms of National Employer Insurance?
A PAYE Settlement Agreement (PSA) is a formal arrangement between an employer and HMRC that allows you to make a single annual payment to cover both the income tax and National Insurance due on certain minor or irregular expenses and benefits provided to employees. Rather than reporting and taxing each individual item through payroll or on P11D forms, you settle the liability in one go, which can significantly simplify administration.
What can a PSA cover? HMRC allows a PSA to cover expenses and benefits that are minor, irregular, or impractical to handle through payroll. Common examples include:
- Staff entertaining (such as a Christmas party that exceeds the £150 per head exemption)
- Small gifts or vouchers that are not trivial benefit-exempt
- Shared benefits where it is impossible to identify the individual amount per employee
- Irregular awards or one-off payments that are difficult to process in real time
You cannot include items that are cash or cash vouchers, beneficial loans, regularly provided large benefits, or anything that is already processed through payroll.
Class 1B and PSAs When you have a PSA in place, you pay Class 1B National Insurance instead of Class 1 or Class 1A on the items covered by the agreement. The Class 1B rate for 2026 is 15%. It is applied to the total taxable value of all benefits and expenses covered by the PSA, plus the income tax you are grossing up and paying on behalf of employees.
Payment Deadline The Class 1B NI and the income tax due under a PSA must both be paid to HMRC by 22 October following the end of the tax year covered by the agreement (19 October if paying by cheque). For the 2026 tax year, this means payment by 22 October 2026.
Applying for a PSA You need to apply to HMRC to set up a PSA before the end of the tax year it will cover. Once in place, a PSA typically continues from year to year unless either party cancels it. You must confirm the items covered annually and calculate the total settlement amount to submit to HMRC.
For many micro businesses and small employers, a PSA can make managing staff benefits much less time-consuming, particularly where expenses are occasional and varied.
Employer NIC on Benefits You Receive from Your Employer
When an employer provides an employee with a benefit that has a monetary value, and that benefit is not specifically exempt under HMRC rules, employer NI becomes payable on the taxable value of that benefit. This is true whether the benefit is provided in cash, in kind, or through a salary sacrifice arrangement.
Here is a practical look at how employer NIC applies to some of the most common benefit types:
Company Cars A company car provided for private use is one of the most common taxable benefits. The taxable value (the benefit in kind value) is calculated based on the car’s list price and its CO2 emissions. Class 1A NI at 15% is payable by the employer on this taxable value and must be reported via P11D or through payrolled benefits.
Private Medical Insurance If your business pays for health insurance for employees, the premiums paid are a taxable benefit. The full cost of the premium is treated as the benefit in kind value, and you pay Class 1A NI at 15% on this amount.
Company Mobile Phones One mobile phone provided solely for business use is generally exempt from NI. However, if the phone is available for significant personal use or if more than one phone is provided, NI may apply.
Trivial Benefits Benefits costing £50 or less per occurrence, which are not cash or a cash voucher, are not a reward for services, and are not provided under salary sacrifice, are exempt from both income tax and employer NI. There is no annual limit on trivial benefits for employees generally, but directors of close companies (with five or fewer shareholders) are capped at £300 of trivial benefits per tax year.
Salary Sacrifice Arrangements If an employee sacrifices part of their salary in exchange for a benefit (such as pension contributions, cycle to work, or electric vehicle schemes), employer NI is calculated on the lower post-sacrifice salary rather than the original gross salary. This means salary sacrifice schemes can reduce your employer NI liability, which at 15% in 2026 makes them even more tax-efficient than in previous years.
Understanding which benefits are exempt and which are taxable can make a significant difference to your employer NI bill. If you are providing a range of benefits, it is worth reviewing the full HMRC list of exempt benefits to ensure you are not paying NI where it is not required.
What Is a National Insurance Number?
A National Insurance (NI) number is a unique personal reference number issued to individuals in the UK. It is made up of two letters, six digits, and a final letter — for example, AB123456C. Every working-age person in the UK needs one to work legally, pay tax, and access certain government benefits.
For employers, the NI number is an important piece of employee information that must be recorded and used when submitting payroll data to HMRC through Real Time Information (RTI). It links the employee’s NI contributions and tax payments to their personal record with HMRC, which in turn affects their entitlement to things like the State Pension, Statutory Sick Pay, and Statutory Maternity or Paternity Pay.
Why it matters for payroll: When you add a new employee to your payroll, you should ask for their NI number before their first pay date. If an employee does not yet have one, for example, if they are a new arrival to the UK, they can apply to HMRC directly. You can still pay them in the meantime, but you should chase the NI number as soon as possible to ensure accurate records.
NI numbers and employer responsibilities: You are not required to verify the authenticity of an employee’s NI number, that is not your legal duty. However, you are required to include it in your payroll submissions whenever it is known. Failing to include it repeatedly can attract attention from HMRC during a compliance review.
Lost or unknown NI numbers: If an employee has lost their NI number or cannot remember it, HMRC can confirm it through the personal tax account at GOV.UK. Employees can also call HMRC directly. As an employer, you should not attempt to guess or generate an NI number for an employee under any circumstances.
What Are the Employer's Responsibilities?
Running a payroll in the UK comes with a set of legal obligations that sit firmly with you as the employer. These are not optional, HMRC expects every employer to meet them consistently and accurately. Here is a full summary of what you are required to do:
1. Deduct employee NI contributions accurately You must calculate and deduct the correct amount of primary Class 1 NI from your employees’ gross pay every pay period. This is based on their earnings above the primary threshold of £12,570 per year (£1,048 per month / £242 per week) for 2026.
2. Pay employer NI to HMRC on time You must calculate and pay your employer NI, secondary Class 1 contributions by the 22nd of the month following the end of each tax month (or 19th if paying by post). Both the employee and employer contributions are paid together as part of your PAYE bill.
3. Submit Real Time Information (RTI) returns Every time you pay an employee, you must submit a Full Payment Submission (FPS) to HMRC on or before the pay date. This tells HMRC about the pay, deductions, and NI contributions made for each employee.
4. Report expenses and benefits If you provide taxable benefits in kind, you must either payroll them in real time or submit P11D forms by 6 July following the tax year. Class 1A NI on those benefits must be paid by 22 July.
5. Maintain accurate payroll records You must keep records of every employee’s pay, NI contributions, and deductions for at least three years from the end of the tax year they relate to. These records must be available for HMRC inspection if requested.
6. Follow year-end processes At the end of each tax year, you must submit a Final Payment Submission (FPS) or Employer Payment Summary (EPS) to close the year with HMRC. You must also provide employees with a P60 by 31 May showing their total pay and deductions for the year.
7. Manage PAYE Settlement Agreements where applicable If you have a PSA in place, you must calculate the Class 1B NI and income tax due under the agreement and pay it to HMRC by 22 October following the tax year.
8. Comply with minimum wage laws Employer NI is separate from your obligation to pay at least the National Minimum Wage or National Living Wage. From April 2025, the National Living Wage rose to £12.21 per hour for workers aged 21 and over.
Failing to meet any of these responsibilities can lead to HMRC penalties, interest on late payments, and in serious cases, formal investigations. If managing payroll feels complex, our accounts filing service at Micro Entity Accounts can help keep you on the right side of HMRC.
FAQs: Employer National Insurance Contributions
How much is employer National Insurance in 2026?
The employer NI rate for 2026 is 15%, applied to each employee’s earnings above the secondary threshold of £5,000 per year. This is an increase from 13.8% in 2024–25, announced in the Autumn Budget 2024 and effective from 6 April 2025.
How do I calculate employer National Insurance for 2026?
Subtract the secondary threshold (£5,000 annually) from your employee’s gross annual salary. Then multiply the result by 15%. For example, an employee earning £25,000 triggers employer NI on £20,000. At 15%, that equals £3,000 per year in employer NI. You can divide by 12 for the monthly figure (£250 per month).
What is the new employers' NI rate for 2026?
The new employer NI rate effective from 6 April 2025 is 15%. At the same time, the secondary threshold, the earnings point at which the rate kicks in, dropped from £9,100 to £5,000 per year. Both changes apply for the 2026 tax year and are set to remain until at least 5 April 2028.
What is the secondary threshold for employer NI in 2026?
The secondary threshold is £5,000 per year, which equals £417 per month or £96 per week. Employer NI at 15% applies on all employee earnings above this figure. Below the threshold, no employer NI is due.
Do employers pay NI for all employees?
Most employees trigger employer NI once their earnings exceed £5,000 per year. However, some groups attract a 0% employer NI rate up to the Upper Secondary Threshold of £50,270. These include employees under the age of 21 and apprentices under the age of 25, as well as employees working in Freeport tax sites and certain veterans returning to employment.
What is Employment Allowance and who can claim it?
Employment Allowance is a relief that allows eligible employers to reduce their annual employer NI bill by up to £10,500 in 2026. Most UK businesses can claim it. From April 2025, the previous restriction that excluded employers with a secondary NI liability over £100,000 has been removed. You claim it through your payroll software or via HMRC’s online PAYE system.
Is employer NI paid on top of the salary I offer?
Yes. Employer NI is an additional cost on top of the gross salary you pay. It does not come out of the employee’s pay, it comes directly from your business. This means the true cost of employing someone is their gross salary plus your employer NI liability, plus any pension contributions you make on their behalf.
Do directors pay employer National Insurance?
Yes. If a director takes a salary above the secondary threshold of £5,000 per year, the company must pay employer NI at 15% on the excess. Many micro business directors structure their salary just below the secondary threshold (or at the primary threshold of £12,570 to maintain NI credit eligibility) to minimise employer NI. The remaining income is typically drawn as dividends, which are not subject to NI.
When is employer NI due to be paid to HMRC?
Employer NI is due to HMRC by the 22nd of the month following the end of each tax month (or 19th if paying by cheque or postal order). For example, NI for the April payroll (tax month ending 5 May) is due by 22 May. Late payment attracts interest and can trigger penalties.
What is the difference between Class 1, Class 1A, and Class 1B NI?
Class 1 (secondary) NI is paid on employee wages above the secondary threshold. Class 1A is paid on taxable benefits in kind, such as a company car or private healthcare, at the end of the tax year. Class 1B is paid under a PAYE Settlement Agreement on minor or irregular benefits settled annually. All three classes carry a rate of 15% in 2026.
Is there employer NI on redundancy payments?
Genuine redundancy payments up to £30,000 are free from both income tax and NI. However, any amount above £30,000 is subject to income tax, and employer Class 1A NI at 15% applies to the excess over £30,000. This must be reported and paid through payroll in real time, not via a P11D at year end.
Do part-time employees trigger employer NI?
Yes, if their annual earnings exceed £5,000. For a part-time employee earning, say, £7,000 per year, employer NI is due on £2,000 (£7,000 minus £5,000) at 15%, which equals £300 per year. Even low-hours or minimum-wage workers may now fall within the threshold given it dropped to £5,000 in 2026.
How does employer NI work for salary sacrifice schemes?
In a salary sacrifice arrangement, the employee agrees to a lower gross salary in exchange for a non-cash benefit (such as pension contributions, electric vehicle leasing, or cycle to work). Employer NI is calculated on the reduced gross salary after sacrifice, not the original amount. This reduces your NI liability and is one of the most effective ways to manage employer NI costs, particularly at the current 15% rate.
What happens if I underpay or miss employer NI payments?
HMRC will charge interest on any unpaid NI from the due date. Persistent late payment leads to automatic penalty surcharges. If HMRC believes NI has been deliberately underpaid, they can open a formal compliance investigation, which can result in back payments, interest, and substantial fines. Keeping accurate payroll records and filing RTI submissions on time is the best way to avoid this.
Can I use the Employer NI Calculator for multiple employees?
Yes. You can run the calculator separately for each employee, using their individual gross salary figures, to calculate the employer NI for each one. Add the results together for your total monthly or annual employer NI liability across your whole payroll. This is particularly useful when you are budgeting for new hires or reviewing your overall payroll costs at the start of a new tax year.