Employer NI Calculator
Calculate employer National Insurance contributions (Class 1 secondary) including Employment Allowance eligibility for 2025/26.
Employee Details
Enter employee details to calculate employer NI contributions
Important Disclaimer
This tool provides indicative calculations only and does not constitute financial, accounting, tax, or legal advice. The accuracy of results depends on the accuracy of information you provide. Consult a qualified professional for complex situations.
Overview
Employer National Insurance (NI) contributions are a significant payroll cost for UK businesses, and understanding how to calculate them correctly is essential for compliance and financial planning. Since April 2025 the employer rate is 15% and the secondary threshold is £5,000 — a structure that continues through 2026/27 — while the Employment Allowance stands at £10,500. Miscalculating these contributions can lead to unexpected costs, penalties from HMRC, or cash flow issues if overpayments are made. The calculator breaks the calculation down step by step, applying the £5,000 threshold, the zero-rate reliefs for under-21s and apprentices, and the £10,500 Employment Allowance correctly, so you can see your true cost of employment before you commit to a salary.
Worked Example (2026/27)
### Worked Example: Employer NI Calculation for 2026/27
**Scenario**: A UK company pays an employee (aged 30, not a director) a salary of £6,500 a month. The employer wants to know the annual employer NI cost and the effect of the Employment Allowance.
**Inputs**: - Annual salary: £6,500 × 12 = £78,000 - Number of employees: 1 (plus a director paid above the threshold, so the company is eligible for the Employment Allowance) - Employment Allowance: £10,500 (annual)
**Calculation Steps**: 1. **Earnings above the threshold**: £78,000 − £5,000 (secondary threshold) = £73,000 2. **Employer NI rate**: 15% 3. **Gross employer NI**: £73,000 × 15% = £10,950 4. **Employment Allowance adjustment**: £10,950 − £10,500 = £450
**Final Figure**: The employer's NI cost for this employee in 2026/27 is £450 after the Employment Allowance (£10,950 before it). The employee's own NI is deducted from their pay separately and does not change the employer's liability.
**Variant — employee under 21**: for the same £78,000 salary paid to an employee under 21, the 0% rate applies up to the £50,270 Upper Secondary Threshold, so employer NI is (£78,000 − £50,270) × 15% = £4,159.50 before any Employment Allowance.
2026/27 Rates & Thresholds
| Rate/Threshold | Value |
|---|---|
| Employer Class 1 NI rate (above secondary threshold) | 15% |
| Secondary threshold (annual) | £5,000 |
| Employment Allowance (annual) | £10,500 |
| Under-21 / apprentice-under-25 / veteran rate up to £50,270 (Upper Secondary Threshold) | 0% |
| Rate above the Upper Secondary Threshold | 15% |
| Class 1A NI on benefits in kind | 15% |
| Employee Class 1 NI (for reference) | 8% on £12,570–£50,270, 2% above |
Common Mistakes HMRC Penalises
- Claiming the Employment Allowance when ineligible — for example a company whose only employee paid above £5,000 is also a director.
- Failing to apply the £5,000 secondary threshold correctly, leading to overpayment or underpayment of NI.
- Treating the under-21 or apprentice relief as unlimited — the 0% rate stops at the £50,270 Upper Secondary Threshold and 15% applies above it.
- Not accounting for the Employment Allowance cap of £10,500 per year, which applies across the whole payroll rather than per employee.
- Forgetting Class 1A NI at 15% on benefits in kind, which is due on top of the Class 1 NI paid through payroll.
- Incorrectly calculating NI on irregular payments like bonuses or overtime without applying the correct period threshold.
When to Seek Professional Advice
If your business employs a mix of staff under and over 21, or pays anyone above the £50,270 Upper Secondary Threshold while claiming a zero-rate relief, the calculation becomes more complex. Seek advice if you're unsure whether the director-only exclusion blocks your Employment Allowance claim, how to treat off-payroll workers, or how payroll irregularities such as bonuses could lead to miscalculations. A professional can also help if HMRC compliance checks reveal discrepancies in your NI reporting.
Frequently Asked Questions
What is the employer National Insurance rate for 2026/27 and how does the £5,000 threshold work?+
For the 2026/27 tax year, the employer National Insurance rate is 15% on earnings above the £5,000 annual secondary threshold. You pay no employer NI on the first £5,000 of an employee's annual pay, and the 15% rate applies to everything above it with no upper limit. On a £30,000 salary that is (£30,000 − £5,000) × 15% = £3,750 a year, before any Employment Allowance.
How does the £10,500 Employment Allowance reduce my 2026/27 employer NI bill?+
Eligible employers can reduce their total employer Class 1 National Insurance bill by up to £10,500 per tax year — roughly the NI due on the first £70,000 of pay above the threshold across your payroll. You claim it through your payroll software, which files the claim on an Employer Payment Summary (EPS); it applies from the claim onwards and can be backdated up to four tax years if you were eligible.
Why can't some single-director companies claim the Employment Allowance?+
Companies where the only employee paid above the £5,000 secondary threshold is also a director are excluded from the Employment Allowance. A one-person limited company therefore pays full employer NI on the director's salary. Genuinely employing at least one other person paid above £5,000 a year restores eligibility, but the employment must be real — adding a spouse to payroll with no actual duties invites an HMRC challenge.
Do I pay employer NI for employees under 21 or apprentices under 25?+
Not on earnings up to the Upper Secondary Threshold of £50,270 a year — the employer rate is 0% for employees under 21, apprentices under 25, and armed forces veterans in their first year of civilian employment. Earnings above £50,270 are charged at the normal 15%. The relief only affects employer NI; the employee's own NI is unchanged.
Do employers pay National Insurance on benefits in kind?+
Yes. Employers pay Class 1A NI at 15% on the taxable value of benefits in kind such as company cars and private medical insurance. It is reported on form P11D(b) and payable by 19 July after the end of the tax year (22 July if paying electronically), on top of the Class 1 NI due through payroll.
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