When did employer NI change to 15%?

From 6 April 2025 following Autumn Budget 2024. The secondary threshold also fell from £9,100 to £5,000/year.

What is the Employment Allowance in 2026/27?

£10,500 — eligible employers deduct this from their employer NI bill. You cannot claim if you are a sole director-employee.

How much extra does each employee cost after April 2025?

A worker on the National Living Wage costs around £683 more in employer NI per year compared to 2024/25.

Employment Law

Employer National Insurance Calculator 2026/27 — Budget 2024 Rates

The Autumn Budget 2024 raised the employer NI rate to 15% and cut the secondary threshold to £5,000/year from April 2025. Enter each employee's salary below to calculate your total liability and Employment Allowance saving.

🏢 Employer NI Calculator — 2026/27

Rate: 15% on earnings above £5,000/year. Employment Allowance: up to £10,500.

Calculation period

Employment Allowance eligible?

Employee 1 — salary (£)

Employee 2 — salary (£)

Employee 3 — salary (£)

Budget 2024 — What Changed for Employers

The Autumn Budget 2024 announced the most significant increase to employer National Insurance since 2011. From 6 April 2025:

Employer NI rate: Rose from 13.8% to 15%
Secondary threshold: Fell from £9,100/year to £5,000/year — meaning employers now pay NI on an additional £4,100 of each worker's salary
Employment Allowance: Rose from £5,000 to £10,500 — helping smaller employers offset some of the increase

The combined effect means a worker earning the National Living Wage of £23,809/year costs their employer approximately £683 more in NI in 2026/27 than in 2024/25.

Employment Allowance — Who Can Claim

The Employment Allowance allows eligible employers to reduce their employer NI liability by up to £10,500 per tax year. You cannot claim if: you are a company where the sole employee is also a director; your employer NI bill was £100,000 or more in the previous tax year; or you are a public authority. You claim through your payroll software by marking "Yes" to Employment Allowance on your Employer Payment Summary (EPS).

How Employer NI Interacts With Small Business Growth

Because the Employment Allowance offsets the first £10,500 of employer NI each year, very small employers with modest payrolls can end up paying little or no employer NI at all. As a business takes on more staff or increases salaries, the allowance is used up more quickly, and the effective NI cost per additional pound of salary rises towards the full 15% rate. This creates a natural "step" in employment costs that many small business owners plan around — for example, timing a new hire early in the tax year to make the fullest use of that year's allowance, or reviewing whether a role could be filled by an existing employee taking on additional hours rather than adding a new person to payroll, since a single higher-earning employee triggers proportionally less NI than the fixed costs of onboarding an entirely new starter.

Employer NI on Different Types of Payment

Employer NI isn't limited to basic salary. It also applies to most cash bonuses, commission, overtime, and taxable expense payments processed through payroll, all added to gross pay before the NI calculation. Certain payments are treated differently: employer pension contributions are NI-exempt (as noted above), as are most genuinely reimbursed business expenses, and statutory payments like Statutory Sick Pay and Statutory Maternity Pay are subject to employer NI in the same way as ordinary salary, since they're paid through the same payroll process. Termination payments have their own rules — employer NI (Class 1A) applies to the portion of a termination payment above £30,000, aligning the NI treatment more closely with how Income Tax already applies to large redundancy or settlement payments above that threshold.

Does the Employment Allowance carry forward if I don't use it all?+

No. The Employment Allowance is a use-it-or-lose-it annual allowance — any unused portion at the end of the tax year simply doesn't carry forward to the next year. You claim it in real time through your payroll software as NI liabilities arise during the year, and it automatically resets to the full amount at the start of each new tax year for eligible employers.

Do I pay employer NI on apprentices or under-21s?+

Employers pay a reduced or zero rate of employer NI for apprentices under 25 and employees under 21, up to the Upper Secondary Threshold (which aligns with the standard Upper Earnings Limit). Above that threshold, the standard 15% rate applies as normal. This relief is separate from and can be combined with the Employment Allowance, making younger and apprentice hires notably cheaper from an NI perspective.

When did the employer NI rate change to 15%?+

From 6 April 2025, following the Autumn Budget 2024 announcement on 30 October 2024. The rate increased from 13.8% to 15% at the same time as the secondary threshold was cut from £9,100 to £5,000/year.

Does employer NI apply to pension contributions?+

No. Employer NI is charged on earnings, not on employer pension contributions. Pension contributions made by the employer are generally NI-exempt, which is one reason salary sacrifice pension schemes can save employers money — the contribution comes from salary before NI is calculated.

Is there employer NI on benefits in kind?+

Yes. Class 1A NI at 15% (from April 2025) is charged on most taxable benefits in kind provided to employees — such as company cars, private medical insurance, and non-trivial gifts. Class 1A is reported and paid annually via P11D and P11D(b), due by 19 July following the tax year end.