Employer National Insurance Calculator 2025/26
Calculate your employer NI costs instantly at the new 15% rate above the £5,000 threshold. Supports all NI categories (A, H, M, V, C), Employment Allowance of £10,500, and total employment cost including pension.
Calculation Breakdown
Employment Cost Breakdown
Year-on-Year Comparison (per employee, before allowance)
Monthly Breakdown 2025/26
| Month | Gross Salary | Employer NI | Employer Pension | Total Cost | vs 2024/25 NI |
|---|
Employer NI Rates & Thresholds 2025/26
| Element | 2025/26 | 2024/25 | Change |
|---|---|---|---|
| Employer NI Rate | 15% | 13.8% | +1.2% |
| Secondary Threshold (annual) | £5,000 | £9,100 | -£4,100 |
| Secondary Threshold (weekly) | £96.15 | £175 | -£78.85 |
| Employment Allowance | £10,500 | £5,000 | +£5,500 |
| Eligibility Cap | Removed | £100k NI bill | All employers eligible |
| Apprentice Upper Threshold (under 25) | £50,270 | £50,270 | No change |
Employer NI Cost by Salary Level
| Annual Salary | Employer NI (Before Allowance) | Increase from 2024/25 |
|---|---|---|
| £20,000 | £2,250 | +£746 |
| £25,000 | £3,000 | +£806 |
| £30,000 | £3,750 | +£866 |
| £40,000 | £5,250 | +£986 |
| £50,000 | £6,750 | +£1,106 |
| £75,000 | £10,500 | +£1,406 |
| £100,000 | £14,250 | +£1,706 |
What is Employer National Insurance?
Employer National Insurance Contributions (NICs) are a tax paid by employers on top of each employee's salary. Unlike employee NI which is deducted from wages, employer NI is an additional cost borne entirely by the business. These contributions fund the NHS, state pensions, and social security benefits.
From April 2025, the employer NI rate increased from 13.8% to 15%, while the Secondary Threshold dropped from £9,100 to £5,000. This means employers now pay NI on a larger portion of each employee's earnings at a higher rate — the most significant change to employer NI in a decade.
How is Employer NI Calculated?
The formula is straightforward:
Employer NI = (Employee Salary - Secondary Threshold) × 15%
For the most common NI categories (A, B, C, J), the Secondary Threshold is £5,000 per year. For apprentices under 25 (category H), employees under 21 (category M), and veterans (category V), the threshold is the much higher Upper Secondary Threshold of £50,270.
Unlike employee NI, there is no upper earnings limit for employer NI. Employers pay 15% on all earnings above the threshold, regardless of salary level.
Employment Allowance
The Employment Allowance of £10,500 for 2025/26 reduces your Class 1 employer NI liability. You claim it through your payroll software by indicating eligibility in your Employer Payment Summary (EPS). The allowance is deducted automatically month by month until used up.
Who cannot claim: Single-director companies with no other employees, companies where more than 50% of work is public/local authority functions, and service companies caught by IR35.
What Changed from April 2025?
- Rate increase: 13.8% → 15% (+1.2 percentage points)
- Lower threshold: £9,100 → £5,000 (employers now pay NI on £4,100 more of each employee's earnings)
- Higher allowance: £5,000 → £10,500 (to offset costs for smaller businesses)
- Eligibility cap removed: The £100,000 NI bill cap no longer applies — all eligible employers can claim
Impact by Business Size
Small Business (3 Employees)
TechStart Ltd employs a developer at £35,000, a designer at £30,000, and an admin at £24,000.
- Developer: (£35,000 - £5,000) × 15% = £4,500
- Designer: (£30,000 - £5,000) × 15% = £3,750
- Admin: (£24,000 - £5,000) × 15% = £2,850
- Total before allowance: £11,100
- Employment Allowance: -£10,500
- Net payable: £600 per year (just £50/month)
Medium Business (25 Employees)
BuildRight Construction employs 25 staff averaging £32,000 (total payroll: £800,000).
- NI per employee: (£32,000 - £5,000) × 15% = £4,050
- Total: 25 × £4,050 = £101,250, minus £10,500 = £90,750/year
- Under old rates: £79,005. Increase: £11,745 (+14.9%)
Large Business (200 Employees)
National Services Group employs 200 staff averaging £40,000 (payroll: £8m).
- Total NI: 200 × £5,250 = £1,050,000, minus £10,500 = £1,039,500
- Plus Apprenticeship Levy: (£8m × 0.5%) - £15,000 = £25,000
- Under old rates: £847,760. Increase: £216,740 (+25.6%)
NI Categories & Special Reliefs
Different categories of worker attract different employer NI treatment:
| Category | Who | Employer NI Threshold |
|---|---|---|
| A | Standard employees | £5,000/year |
| H | Apprentices under 25 | £50,270/year |
| M | Employees under 21 | £50,270/year |
| V | Veterans (first 12 months civilian employment) | £50,270/year |
| C | Employees over State Pension age | £5,000/year |
Hiring an apprentice under 25 on £25,000 costs zero employer NI (earnings below the £50,270 threshold). This can save £3,000 per apprentice compared to a standard employee.
Class 1A NI on Benefits in Kind
Employers pay Class 1A NI at 15% on the taxable value of most benefits reported on form P11D. This includes company cars, private medical insurance, gym memberships, and other non-cash benefits. Class 1A NI is due by 22 July following the end of the tax year.
Strategies to Reduce Employer NI Costs
- Salary sacrifice for pensions: Every £1,000 sacrificed saves £150 in employer NI. A company with 50 staff each sacrificing £200/month saves £18,000/year.
- Electric car schemes: Salary sacrifice for ultra-low emission vehicles provides similar NI savings while being a valued employee benefit.
- Hire apprentices under 25: Zero employer NI on earnings up to £50,270, saving up to £6,790 per apprentice vs standard employees.
- Claim Employment Allowance: With the cap removed, all eligible employers should claim the full £10,500.
Apprenticeship Levy
Employers with a pay bill exceeding £3 million pay the Apprenticeship Levy at 0.5%. Each employer receives a £15,000 annual allowance. For a company with a £5 million pay bill: (£5m × 0.5%) - £15,000 = £10,000 per year. The levy funds go into a digital account for approved apprenticeship training.
RTI Reporting & Compliance
All employers report PAYE and NI to HMRC in real time through the Full Payment Submission (FPS), submitted on or before each payday. Employment Allowance adjustments use the Employer Payment Summary (EPS). Late FPS returns trigger penalties of £100 per 50 employees per month.
How to Use This Calculator
Our Employer National Insurance Calculator is designed to give you an instant, accurate picture of your NI obligations for the 2025/26 tax year. Follow these four simple steps to calculate your employer NI costs:
Step 1: Enter Employee Salary and Pay Period
Type the employee's gross salary into the salary field. Select the matching pay period — per year, per month, or per week — and the calculator automatically converts to an annual figure. For example, entering £2,917 with "Per Month" selected converts to £35,004 per year. No manual conversion needed.
Step 2: Choose the NI Category Letter
Select the correct NI category for the employee. Most workers fall under Category A (standard). If your employee is an apprentice under 25 (Category H), under 21 (Category M), or a veteran in their first 12 months of civilian employment (Category V), select the appropriate letter. Categories H, M, and V use the higher Upper Secondary Threshold of £50,270 — meaning zero employer NI on earnings below that amount. Category C applies to employees over State Pension age.
Step 3: Set Number of Employees and Employment Allowance
If you have multiple employees on the same salary, enter the count to see your combined NI liability. Tick the Employment Allowance checkbox if your business qualifies for the £10,500 reduction (most do since the eligibility cap was removed in 2025/26). Leave it unticked for single-director companies with no other employees, or businesses excluded for other reasons.
Step 4: View Your Results Instantly
Results update automatically as you type — no need to click a button. The top row shows your gross employer NI per employee (annual, monthly, and weekly) plus the total employment cost including pension. If Employment Allowance is ticked, a second row shows the allowance saving and the net NI actually payable to HMRC. The detailed breakdown table and year-on-year comparison appear below.
Worked Examples: Employer NI Calculations for 2025/26
Below are four real-world examples showing exactly how employer National Insurance is calculated at different salary levels. All examples use the 2025/26 rates: 15% employer NI on earnings above the £5,000 Secondary Threshold.
Example 1: Part-Time Worker on £12,000 per Year
Calculation:
Gross annual salary: £12,000
Less Secondary Threshold: -£5,000
NI-able earnings: £7,000
Employer NI at 15%: £7,000 × 0.15 = £1,050 per year
Monthly cost: £87.50 | Weekly cost: £20.19
With Employment Allowance: If Sarah is one of several employees and the business claims the £10,500 allowance, this £1,050 would be fully absorbed, meaning zero employer NI payable for this employee.
Example 2: Average UK Salary of £35,000 per Year
Calculation:
Gross annual salary: £35,000
Less Secondary Threshold: -£5,000
NI-able earnings: £30,000
Employer NI at 15%: £30,000 × 0.15 = £4,500 per year
Monthly cost: £375.00 | Weekly cost: £86.54
Comparison with 2024/25: Under the old rates (13.8% above £9,100), the employer NI would have been £3,574.20. The increase for 2025/26 is £925.80 (+25.9%) per employee.
Total employment cost: £35,000 salary + £4,500 employer NI + £1,050 minimum pension (3%) = £40,550
Example 3: Senior Employee on £60,000 per Year
Calculation:
Gross annual salary: £60,000
Less Secondary Threshold: -£5,000
NI-able earnings: £55,000
Employer NI at 15%: £55,000 × 0.15 = £8,250 per year
Monthly cost: £687.50 | Weekly cost: £158.65
Comparison with 2024/25: Under the old rates, employer NI would have been £7,024.20. The increase is £1,225.80 (+17.5%).
Total employment cost: £60,000 salary + £8,250 employer NI + £1,800 minimum pension (3%) = £70,050
Example 4: Company Director on £100,000 per Year
Calculation:
Gross annual salary: £100,000
Less Secondary Threshold: -£5,000
NI-able earnings: £95,000
Employer NI at 15%: £95,000 × 0.15 = £14,250 per year
Monthly cost: £1,187.50 | Weekly cost: £274.04
With Employment Allowance: £14,250 - £10,500 = £3,750 net employer NI payable
Comparison with 2024/25: Under the old rates, employer NI would have been £12,544.20. The gross increase is £1,705.80 (+13.6%), but with the higher Employment Allowance the net cost actually falls from £7,544.20 to £3,750.
Note: If David is the sole director with no other employees, the company cannot claim Employment Allowance and must pay the full £14,250. Director NI is calculated on an annual basis (not cumulative week by week), which may affect in-year cash flow.
Understanding Your Results
Once you have run a calculation, the results panel displays several key pieces of information. Here is what each part means and how to use it for your business planning.
Gross Employer NI (Annual, Monthly, Weekly)
The top row of coloured boxes shows the gross employer NI per employee broken down by period. These figures represent the NI cost before any Employment Allowance is applied. The annual figure covers the full 2025/26 tax year (6 April 2025 to 5 April 2026). Monthly and weekly amounts divide this evenly for payroll budgeting. The purple "Total Employment Cost" box adds salary + employer NI + 3% auto-enrolment pension to give the true cost of employing that person.
Employment Allowance and Net NI
When the Employment Allowance checkbox is ticked, a separate green section appears showing the allowance saving and the net NI actually payable to HMRC. This separation makes it clear what the NI cost is per employee versus what you actually pay after the allowance offset. For most small businesses, the allowance significantly reduces — or eliminates — the total NI bill.
The Calculation Breakdown
The breakdown table shows each step in detail: gross salary, NI category, secondary threshold, NI-able earnings, gross NI at 15%, any employees multiplier, the Employment Allowance deduction, net NI payable, employer pension, and total employment cost. This is useful for verifying against your payroll records or sharing with your accountant.
Year-on-Year Comparison
The comparison section shows how your employer NI cost has changed between 2024/25 and 2025/26. The 2024/25 column uses the old rates (13.8% above a £9,100 threshold), while the 2025/26 column uses the new rates (15% above £5,000). The red bar at the bottom shows the absolute increase in pounds and the percentage change. This is particularly useful when preparing budget forecasts or explaining cost increases to stakeholders.
What This Means for Total Employment Cost
It is important to understand that employer NI is a cost on top of the employee's gross salary — it does not come out of the employee's pay. When budgeting for a new hire or reviewing payroll costs, your total employment cost per employee is:
Total Employment Cost = Gross Salary + Employer NI + Employer Pension Contributions
Under auto-enrolment, the minimum employer pension contribution is 3% of qualifying earnings. So for an employee on £35,000, the true cost to the employer is approximately £35,000 + £4,500 (NI) + £1,050 (pension) = £40,550. For higher earners, employer NI can add 13–15% on top of the salary. Factor these costs into every hiring decision, salary review, and annual budget to avoid unexpected payroll shortfalls.
Frequently Asked Questions
The Employer NI rate for 2025/26 is 15%, increased from 13.8% in 2024/25. This applies to all employee earnings above the Secondary Threshold of £5,000 per year (£96.15 per week). There is no upper earnings limit for employer NI.
Almost all employers now qualify following the removal of the £100,000 NI bill cap. The main exclusions are: single-director companies with no other employees, companies where more than 50% of work is in public/local authority functions, and service companies caught by IR35. Charities and businesses of any size can claim the full £10,500.
No. Unlike employee NI, which drops from 8% to 2% above the Upper Earnings Limit (£50,270), employer NI has no upper limit. Employers pay 15% on all earnings above the £5,000 threshold regardless of salary level. For an employee earning £200,000, employer NI is (£200,000 - £5,000) × 15% = £29,250 per year.
Employers are exempt from NI on earnings up to £50,270 for apprentices under 25 (category H). An apprentice earning £25,000 costs zero in employer NI. Only earnings above £50,270 attract the 15% rate. Similar relief applies to employees under 21 (category M) and veterans in their first 12 months of civilian employment (category V).
Yes, significantly. When employees sacrifice salary into pension contributions, cycle-to-work schemes, or electric car schemes, the reduced gross salary means lower employer NI. For each £1,000 sacrificed, you save £150 (15%). A company with 50 employees each sacrificing £3,000 into pensions saves £22,500 per year in employer NI alone.
The Employment Allowance for 2025/26 is £10,500 (up from £5,000 in 2024/25). It reduces your total Class 1 employer NI liability for the full tax year. You claim it through your payroll software by ticking the Employment Allowance indicator in your Employer Payment Summary (EPS) submitted to HMRC. Once claimed, the allowance is deducted automatically from your monthly NI payments until the full £10,500 is used up. You claim once per tax year and the allowance resets every April. The £100,000 NI bill eligibility cap has been removed, meaning all eligible employers — regardless of size — can now claim the full amount.
Employer NI must be paid to HMRC by the 22nd of each month if paying electronically (direct debit, BACS, or online banking), or by the 19th of each month if paying by post. Payments cover the previous tax month, which runs from the 6th to the 5th. For example, NI deducted during the period 6 April to 5 May must reach HMRC by 22 May (electronic) or 19 May (postal). Small employers whose average monthly payments are below £1,500 may be able to pay quarterly instead. Late payments can result in interest charges and penalties from HMRC.
No. Employer pension contributions are completely exempt from employer National Insurance. Only the employee's gross salary is subject to employer NI. This is why salary sacrifice arrangements for pensions are so tax-efficient: when an employee agrees to reduce their gross salary in exchange for higher employer pension contributions, the sacrificed amount avoids both employer NI (saving 15%) and employee NI (saving 8%). For example, if an employee sacrifices £5,000 of salary into their pension, the employer saves £750 in NI, and the employee saves £400 in NI plus income tax on the sacrificed amount.
Employer NI and employee NI are two entirely separate charges, even though both are reported through Real Time Information (RTI). Employer NI is paid at 15% on all employee earnings above the Secondary Threshold of £5,000, with no upper limit. Employee NI is paid at 8% on earnings between the Primary Threshold (£12,570) and the Upper Earnings Limit (£50,270), then at 2% on everything above £50,270. The key difference is that employer NI is an additional cost borne by the business on top of the salary, whereas employee NI is deducted from the employee's gross pay. Both appear on the payroll but on separate lines, and both must be paid to HMRC together by the monthly deadline.
Employer NI typically adds between 10% and 15% on top of your gross salary costs, depending on the salary level and whether you qualify for Employment Allowance. For a standard employee earning £35,000, employer NI is £4,500 per year — adding 12.9% to the base salary cost. When planning your payroll budget, always calculate the total employment cost: gross salary + employer NI (15% above £5,000) + employer pension contributions (minimum 3% under auto-enrolment). For a £35,000 employee, this works out to approximately £40,550. For a team of 10 employees at that salary, the total employer NI alone is £45,000 per year (before Employment Allowance). Building these costs into your forecasts from the outset prevents budget surprises and helps you make informed hiring decisions.
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