Employer National Insurance Calculator
Post-Budget 2024: Employer NI rose to 15% with the threshold halved to £5,000. Calculate the real cost of employing staff.
Understanding Employer National Insurance for 2026/27
Employer National Insurance contributions are paid by UK employers on top of each employee’s salary. From April 2025 following the Autumn 2024 Budget, the rate increased from 13.8% to 15% and the Secondary Threshold at which the charge starts was slashed from £9,100 to just £5,000 per year. This was the biggest shake-up to Employer NI in a decade, and the combined effect of the higher rate and lower threshold means SMEs typically see a 25-35% increase in their Employer NI bill per employee.
The calculation is straightforward: Employer NI = 15% of (gross salary − £5,000). For a full-time employee on £35,000 per year, that is 15% of £30,000 = £4,500 annually, compared with roughly £3,574 under the old rules. Multiplied across a workforce, the impact is substantial — a 10-person business paying average salaries of £35,000 faces an extra £9,258 in Employer NI costs each year.
The main relief available is the Employment Allowance, which increased to £10,500 per tax year in April 2025. This offsets Employer NI liability for eligible businesses — most private limited companies, partnerships, and charities — but explicitly excludes single-director companies with no other employees. The employer NI calculator above shows the total bill under the new 2025+ rules, compares it against the pre-Budget position, and applies the Employment Allowance where eligible.
Key Figures for the 2026/27 Tax Year
- Employer NI rate (from April 2025): 15%
- Secondary Threshold (from April 2025): £5,000 per year
- Previous rate (before April 2025): 13.8%
- Previous threshold: £9,100 per year
- Employment Allowance (2025+): £10,500 per year
- Upper Secondary Threshold (under-21s): £50,270 — no Employer NI below this
- Apprentice Upper Secondary Threshold: £50,270 — no Employer NI for apprentices under 25
How to Use the Employer National Insurance Calculator
- Enter the number of employees you want to calculate for.
- Enter the average annual salary (or total payroll divided by headcount).
- Toggle "eligible for Employment Allowance" if your business qualifies.
- Review the post-Budget Employer NI bill at 15% / £5,000 threshold.
- Compare against the pre-Budget bill at 13.8% / £9,100 to see the real-world cost of the 2024 Budget change.
- Note the Employment Allowance offset and resulting net cost per employee.
Frequently Asked Questions
What is the current Employer National Insurance rate?
From 6 April 2025, Employer NI is charged at 15% on earnings above the £5,000 Secondary Threshold. This is an increase from the previous 13.8% rate, which applied to earnings above £9,100. Both changes were announced in the Autumn 2024 Budget and took effect at the start of the 2025/26 tax year.
Who is eligible for the Employment Allowance?
Most UK businesses can claim the £10,500 Employment Allowance to offset Employer NI, including limited companies, partnerships, and charities. However, single-director companies with no other employees are excluded, as are public bodies and businesses providing services wholly or mainly to the public sector (though some exemptions apply for care and community service).
How do I calculate Employer NI for an employee?
The formula is simple: Employer NI = 15% × (annual salary − £5,000). For example, an employee earning £30,000 has Employer NI of 15% × £25,000 = £3,750 per year. If the salary is below £5,000 there is no Employer NI. The calculation is done per employee, not on total payroll.
Are there any exemptions from Employer NI?
Yes. Employers pay no Employer NI on earnings below £50,270 for employees under 21, apprentices under 25, armed forces veterans in their first 12 months of civilian employment, and qualifying new employees in Freeport and Investment Zone tax sites. These exemptions can significantly reduce the Employer NI cost for qualifying workforces.
How much has Employer NI gone up since the 2024 Budget?
The combined effect of raising the rate from 13.8% to 15% and cutting the threshold from £9,100 to £5,000 means Employer NI costs for a typical SME have increased by approximately 25-35% per employee. For a £35,000 salary, the annual bill rose from £3,574 to £4,500 — an extra £926 per year per employee.
Can salary sacrifice reduce Employer NI costs?
Yes. Salary sacrifice arrangements (where employees agree to a lower gross salary in exchange for employer pension contributions) reduce the Employer NI base and therefore the bill. Many employers now pass some of this NI saving back to employees as an enhanced pension contribution — creating a win-win that the Salary Sacrifice Calculator can model.
Related Calculators
- UK Take-Home Pay Calculator — see the employee side of the tax and NI picture
- Salary Sacrifice vs Standard Pension Calculator — reduce Employer NI via salary sacrifice pension contributions
- Pension Annual Allowance Calculator — check pension contribution limits for sacrifice arrangements
Official Sources
- National Insurance rates and categories (gov.uk)
- Claim the Employment Allowance (HMRC)
- Rates and thresholds for employers 2025 to 2026 (HMRC)
Last reviewed April 2026. Figures and rules apply to the 2026/27 UK tax year. This tool is for guidance only and does not constitute financial advice.
