NIC Increase Cost Calculator
Old: 13.8% above £9,100 | New (April 2025+): 15% above £5,000
Understanding the April 2025 Employer NIC Changes
The October 2024 Autumn Budget introduced the most significant employer NIC changes in decades. Two simultaneous changes hit at once: a rate rise from 13.8% to 15%, and a threshold reduction from £9,100 to £5,000. For a worker on median UK earnings of around £35,000, this means an extra £1,500+ in employer NIC per year.
To soften the blow for small businesses, the Employment Allowance was doubled from £5,000 to £10,500, and the upper payroll limit for eligibility was removed entirely from April 2024.
Frequently Asked Questions
How much did employer NIC increase in April 2025?
From April 2025, employer NIC rose from 13.8% to 15% (an increase of 1.2 percentage points), and the Secondary Threshold dropped from £9,100 to £5,000 per year. The combined effect means employers pay NIC on an extra £4,100 of salary per employee, at a higher rate — roughly doubling the impact for lower-paid workers.
What is the employer NIC rate in 2026?
The employer NIC rate in 2026/27 is 15%. This rate applies to employee earnings above the Secondary Threshold of £5,000 per year. It was increased from 13.8% in April 2025 as part of the Autumn Budget 2024.
What is the new employer NIC threshold in 2026?
The employer NIC Secondary Threshold in 2026/27 is £5,000 per year (approximately £417 per month or £96 per week). Employer NIC at 15% is payable on earnings above this amount. The threshold was cut from £9,100 in April 2025.
How does Employment Allowance offset the NIC increase?
The Employment Allowance was increased from £5,000 to £10,500 from April 2025 to partially offset the NIC rise for smaller employers. Eligible employers can deduct up to £10,500 from their annual employer NIC bill. However, only employers with more than one employee (or a director with employees) can claim — sole director companies with no other employees remain ineligible.
Which businesses are most affected by the employer NIC rise?
Labour-intensive businesses with many lower-paid staff are most affected, such as hospitality, retail, care homes and cleaning companies. A worker earning £15,000 previously incurred just £826 employer NIC per year; under the new rules it rises to £1,500 — an 82% increase. Large employers with NIC bills well above the Employment Allowance bear the full extra cost.