TL;DR:
- From April 2026, the employer National Insurance rate is 15 per cent on earnings above the Secondary Threshold, up from 13.8 per cent.
- The employer NI Secondary Threshold for 2026/27 is £5,000 per year (£96 per week), reduced from £9,100 in the previous tax year.
- Employment Allowance for 2026/27 is £10,500 per year, up from £5,000, and can offset employer NI liability for eligible employers.
- Most employers with five or more employees will face higher annual payroll costs after the April 2026 changes.
- Employer NI is calculated as (annual salary minus Secondary Threshold) multiplied by the employer NI rate, then reduced by any Employment Allowance claimed.
- Accurate employer NI calculation is essential for budgeting, pricing and payroll compliance, and payroll outsourcing can reduce errors and overpayments.
Last reviewed: May 2026. All rates and thresholds reflect the 2026/27 tax year as published by HMRC and GOV.UK. Confirm specific figures against official guidance before making payroll or budget decisions.
Introduction: Why Employer NI Costs Have Changed From April 2026
Employer National Insurance costs have changed materially from April 2026. The employer Class 1 NI rate has increased from 13.8 per cent to 15 per cent, and the Secondary Threshold at which employer NI starts to pay has been reduced from £9,100 to £5,000 per year. At the same time, Employment Allowance has been increased from £5,000 to £10,500 per year to partially offset the impact for many employers.
The net effect is that most employers with five or more employees face higher annual payroll costs in 2026/27. For employers with a single employee or a small team, the increased Employment Allowance may fully or partially offset the higher rate and lower threshold. For larger employers, the combination of a higher rate and lower threshold means a larger portion of the payroll is subject to employer NI, increasing the total liability.
How much has employer NI increased from April 2026. The increase depends on your pay structure, the number of employees and whether you qualify for Employment Allowance. For an employee earning £30,000 per year, the employer NI liability increases from £2,879.80 under the old rules to £3,750 under the new rules, a difference of £870.20 per employee per year. For an employer with ten employees at this salary level, the increase is £8,702 per year.
Employers need to understand how to calculate employer NI in 2026/27 to budget accurately, price their services or products correctly and ensure compliance with HMRC payroll obligations. This page explains the 2026/27 employer NI rates and thresholds, what changed in April 2026, how employer NI is calculated, who qualifies for Employment Allowance, how employer NI differs for different employment types and how outsourcing payroll can reduce errors and overpayments.
For readers who also need to understand payroll compliance deadlines such as P60 and P32 obligations, the payroll compliance UK 2026 guide covers those requirements in full.
Employer NI Calculator
Use the tool below to estimate your employer National Insurance liability for 2026/27. Input an annual salary or hourly rate and hours per week, the number of employees (optional), and whether Employment Allowance applies. The calculator will output employer NI per employee per year and per month, total employer NI cost across all employees, net saving from Employment Allowance and the effective employer NI rate as a percentage of total employment cost.
Estimator
Employer NI Calculator
Estimate employer National Insurance with annual salary or hourly pay, employee count and Employment Allowance.
Calculate Employer NI
For UK payroll budgeting where the 2026/27 employer NI threshold and allowance may affect total cost.
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Set payroll size and Employment Allowance
Your employer NI estimate
This calculator provides an estimate only. Results are based on the information you enter and the employer National Insurance rates and thresholds published by HMRC for 2026/27. This tool is not a substitute for professional payroll or tax advice. Acenteus Accounting accepts no responsibility for any interest, penalties or liabilities arising from reliance on these results. Always verify your employer NI liability with a qualified accountant or payroll adviser before making payments to HMRC.
The explainer below shows how the employer NI number is worked out, what the April 2026 changes mean for your payroll budget and how Employment Allowance can reduce your liability. That context matters because an employer NI calculator is only as accurate as the inputs and assumptions behind it.
Employer National Insurance Rates and Thresholds for 2026/27
The employer National Insurance rate for 2026/27 is 15 per cent on earnings above the Secondary Threshold. This is an increase from 13.8 per cent in the previous tax year. The Secondary Threshold for 2026/27 is £5,000 per year, which is £96 per week or £417 per month. This is a reduction from £9,100 per year in the previous tax year.
These rates and thresholds are set out in HMRC’s guidance on rates and thresholds for employers 2026 to 2027. The rates and thresholds overview on GOV.UK also confirms the employer NI rate and Secondary Threshold for the 2026/27 tax year.
What is the employer NI rate for 2026/27 in the UK. The employer Class 1 NI rate is 15 per cent on earnings above the Secondary Threshold. What is the Secondary Threshold for employer NI in 2026/27. The Secondary Threshold is £5,000 per year (£96 per week, £417 per month).
Below the Secondary Threshold, the employer NI rate is zero per cent. This means no employer NI is payable on earnings up to £5,000 per year. Above the Secondary Threshold, the employer NI rate is 15 per cent on the excess earnings.
There are also special thresholds for under 21s and apprentices. The Upper Secondary Threshold for under 21s and apprentices is £50,270 per year. Employer NI is zero per cent on earnings above this threshold for employees under 21 and for apprentices under 25. This provides a significant cost saving for employers who hire younger staff or apprentices.
The key rates and thresholds for 2026/27 are:
- Employer Class 1 NI rate: 15 per cent on earnings above the Secondary Threshold.
- Secondary Threshold: £5,000 per year (£96 per week, £417 per month).
- Upper Secondary Threshold (under 21s and apprentices): £50,270 per year (0 per cent above this).
- Zero rate applies below the Secondary Threshold.
These thresholds apply to each employee individually. The employer NI liability is calculated per employee and then aggregated across all employees to determine the total employer NI cost for the pay period.
Employer NI is a payroll cost that UK employers must pay on top of gross salaries. What is the difference between employer NI and employee NI. Employer NI is paid by the employer on earnings above the Secondary Threshold. Employee NI is paid by the employee on earnings above the Primary Threshold and is deducted from gross pay through PAYE. Employer NI is not deducted from the employee’s pay. It is an additional cost to the employer.
What Changed in April 2026 and What It Costs Employers
Three key changes took effect from April 2026 for employer National Insurance. The employer NI rate increased from 13.8 per cent to 15 per cent. The Secondary Threshold was reduced from £9,100 to £5,000 per year. Employment Allowance was increased from £5,000 to £10,500 per year.
What changed for employer National Insurance from April 2026. The rate increased, the threshold decreased and the allowance increased. The rate increase and threshold decrease both increase employer NI costs. The allowance increase partially offsets these cost increases for eligible employers.
The net effect is that most employers with five or more employees face higher annual payroll costs. Employers with a single employee or a small team may see little or no increase in employer NI cost if they qualify for Employment Allowance and their total employer NI liability is below the allowance limit.
How much has employer NI increased from April 2026. For an employee earning £30,000 per year, the employer NI liability under the old rules (13.8 per cent on earnings above £9,100) was £2,879.80 per year. Under the new rules (15 per cent on earnings above £5,000), the employer NI liability is £3,750 per year. This is an increase of £870.20 per employee per year.
For an employer with ten employees at £30,000 per year, the increase is £8,702 per year. For an employer with 20 employees at this salary level, the increase is £17,404 per year. These are material increases that affect payroll budgets, pricing decisions and hiring decisions.
The increase in Employment Allowance to £10,500 per year helps offset this cost for eligible employers. If an employer’s total employer NI liability for the year is £10,500 or less, the Employment Allowance can fully offset the liability, resulting in zero employer NI cost for the year. If the liability is above £10,500, the allowance reduces the liability by £10,500.
Employers need to model the impact of these changes on their payroll budget for 2026/27. The employer NI calculator above can help with this modelling. The modelling should include the number of employees, their salary levels, whether Employment Allowance applies and the impact of the higher rate and lower threshold.
The April 2026 changes are part of the broader fiscal position for 2026/27. ICAEW’s prepare for 2026/27: companies guidance highlights the impact of employer NI changes on business costs and hiring decisions. AccountingWEB’s essential employer update 2026 also covers the employer NI changes and their impact on SME employers.
How Employer NI Is Calculated: The Formula Explained
How do I calculate employer National Insurance in 2026/27. The basic formula is Employer NI equals (annual salary minus Secondary Threshold) multiplied by the employer NI rate. This gives the employer NI liability per employee per year before any Employment Allowance is applied.
The formula is:
Employer NI = (Annual Salary – Secondary Threshold) × Employer NI Rate
Where:
- Annual Salary is the gross salary for the year
- Secondary Threshold is £5,000 per year for 2026/27
- Employer NI Rate is 15 per cent for 2026/27
For example, for an employee with an annual salary of £30,000:
- Annual Salary: £30,000
- Secondary Threshold: £5,000
- Taxable earnings: £30,000 – £5,000 = £25,000
- Employer NI rate: 15 per cent
- Employer NI liability: £25,000 × 0.15 = £3,750 per year
This is £312.50 per month (£3,750 divided by 12).
With Employment Allowance of £10,500, the net employer NI cost in year one is £3,750 minus £10,500 offset. Since the liability is below the allowance, the net cost is £0 for this employee. The allowance applies across all employees until it is exhausted.
For an employer with multiple employees, the employer NI liability is calculated for each employee and then aggregated. The total employer NI liability is then reduced by the Employment Allowance (if eligible), up to the allowance limit of £10,500 per year.
How do I calculate employer NI for a part-time employee. The calculation is the same as for a full-time employee. Input the annual salary (or hourly rate and hours per week) and apply the formula. For a part-time employee earning £15,000 per year:
- Annual Salary: £15,000
- Secondary Threshold: £5,000
- Taxable earnings: £15,000 – £5,000 = £10,000
- Employer NI rate: 15 per cent
- Employer NI liability: £10,000 × 0.15 = £1,500 per year
This is £125 per month (£1,500 divided by 12).
Employer NI is also payable on bonuses and commission payments. Do I pay employer NI on bonuses and commission payments. Yes, employer NI is payable on all earnings above the Secondary Threshold, including bonuses, commission, overtime and certain benefits in kind. The calculation is the same as for basic salary.
Is employer NI calculated on gross salary or net salary. Employer NI is calculated on gross salary, not net salary. Gross salary is the salary before any deductions such as income tax, employee NI or pension contributions.
For company directors, employer NI is calculated differently in some respects. How is employer NI calculated for a director who takes dividends instead of a salary. Employer NI is only payable on salary, not on dividends. If a director takes a salary above the Secondary Threshold, employer NI is payable on the excess. If the director takes only dividends and no salary, no employer NI is payable.
How is employer NI calculated for company directors. For directors, employer NI is calculated on an annual basis rather than on a pay-period basis. This is because directors’ earnings are aggregated across the tax year for NI purposes. The calculation follows the same formula but the earnings are aggregated across all pay periods in the year.
The employer NI liability must be paid to HMRC through the PAYE system. The payment deadline for employer NI is the same as the deadline for other PAYE payments. For monthlyPAYE payers, the payment is due by the 22nd of the following month if paying by direct debit or by the 19th if paying by other methods. For quarterly PAYE payers, the payment is due by the 14th of the following month.
Employment Allowance: Who Qualifies and What It Covers
Employment Allowance for 2026/27 is £10,500 per year. This is an increase from £5,000 in the previous tax year. The allowance can be used to offset employer NI liability for eligible employers.
Can I reduce my employer NI bill through Employment Allowance. Yes, if you qualify for Employment Allowance, you can reduce your employer NI bill by up to £10,500 per year. The allowance is claimed via payroll software and is applied against the monthly employer NI liability.
Who qualifies for Employment Allowance in the UK. Eligible employers are those whose employer NI liability was under £100,000 in the previous tax year. The allowance is available to most companies, charities and community amateur sports clubs. Sole directors with no other employees cannot claim the allowance.
How does Employment Allowance work in 2026/27. The allowance is claimed when you start employing people or when you start a new tax year. It is applied against your employer NI liability each month until it is exhausted. Once the allowance is fully used, you pay the full employer NI liability for the remainder of the tax year.
How do I claim Employment Allowance in 2026/27. You claim Employment Allowance through your payroll software. The software will ask whether you want to claim the allowance and will apply it against your employer NI liability each month. You do not need to make a separate claim to HMRC.
Does Employment Allowance apply to my business. It depends on your employer NI liability in the previous tax year and your business structure. If your employer NI liability was under £100,000 in the previous tax year and you are not a sole director with no other employees, you are likely eligible. Check the official guidance on claiming Employment Allowance for the full eligibility criteria.
Employment Allowance can significantly reduce employer NI costs for small employers. For an employer with a total employer NI liability of £8,000 per year, the allowance fully offsets the liability, resulting in zero employer NI cost. For an employer with a total employer NI liability of £20,000 per year, the allowance reduces the liability by £10,500, resulting in a net liability of £9,500 per year.
Employer NI for Different Employment Types: Full Time, Part Time and Directors
Employer NI applies differently to different employment types. The basic calculation is the same but there are differences in how the NI is aggregated and when it is payable.
For full-time employees, employer NI is calculated on the annual salary using the formula above. The employer NI liability is aggregated across all full-time employees and paid through the PAYE system.
For part-time employees, the calculation is the same as for full-time employees. How do I calculate employer NI for a part-time employee. Input the annual salary (or hourly rate and hours per week) and apply the formula. The employer NI liability is aggregated with other employees and paid through the PAYE system.
For directors, employer NI is calculated on an annual basis rather than on a pay-period basis. This is because directors’ earnings are aggregated across the tax year for NI purposes. The employer NI liability for directors is calculated separately from other employees and is paid through the PAYE system.
How is employer NI calculated for a director who takes dividends instead of a salary. Employer NI is only payable on salary, not on dividends. If a director takes a salary above the Secondary Threshold, employer NI is payable on the excess. If the director takes only dividends and no salary, no employer NI is payable.
For employees under 21, employer NI is zero per cent on earnings above the Upper Secondary Threshold of £50,270 per year. This provides a significant cost saving for employers who hire younger staff.
For apprentices under 25, employer NI is zero per cent on earnings above the Upper Secondary Threshold of £50,270 per year. This provides a significant cost saving for employers who hire apprentices.
Employer NI is also payable on bonuses, commission, overtime and certain benefits in kind. Do I pay employer NI on bonuses and commission payments. Yes, employer NI is payable on all earnings above the Secondary Threshold, including bonuses, commission, overtime and certain benefits in kind.
How Outsourcing Payroll Reduces Employer NI Errors and Overpayments
Outsourcing payroll reduces employer NI errors and overpayments by ensuring that the NI calculations are accurate, the payment deadlines are met and the Employment Allowance is claimed correctly.
How does outsourcing payroll help UK employers manage NI compliance. Outsourcing payroll to a specialist provider ensures that the NI calculations are done correctly using the latest rates and thresholds. The provider will also ensure that the payment deadlines are met and the Employment Allowance is claimed correctly.
Payroll outsourcing can also reduce the administrative burden on employers. The employer does not need to manage the payroll software, calculate the NI liability or ensure that the payments are made on time. The outsourced provider handles all of this.
For accounting practices, payroll outsourcing can be offered as a service to clients in response to employer NI pressure. National insurance payroll outsourcing UK is a growing service area as employers face higher NI costs and more complex compliance requirements.
The how cloud-based payroll outsourcing cuts costs for UK accountancy practices guide explains how payroll outsourcing can reduce costs and improve compliance for accounting practices and their clients. The outsourcing for accountants overview also covers how outsourcing can support payroll compliance and cost management.
Acenteus Accounting provides outsourced payroll support for UK employers with a focus on accurate employer NI calculation, compliance with PAYE deadlines and correct claiming of Employment Allowance.
Conclusion: Accurate Employer NI Calculation Starts With the Right Numbers
Accurate employer NI calculation starts with the right numbers. The employer NI rate for 2026/27 is 15 per cent on earnings above the Secondary Threshold of £5,000 per year. Employment Allowance is £10,500 per year for eligible employers. The April 2026 changes have increased employer NI costs materially for many UK employers.
Employers need to understand how to calculate employer NI in 2026/27 to budget accurately, price their services or products correctly and ensure compliance with HMRC payroll obligations. The employer NI calculator above can help with this calculation. The explainer content provides the context and formula needed to understand the calculation.
The right employer NI calculation ensures that employers pay the correct amount to HMRC, claim the correct amount of Employment Allowance and avoid overpayments or underpayments that could lead to interest or penalties. For employers who want to reduce the administrative burden and ensure compliance, outsourcing payroll can be a cost-effective solution.
If you want support with employer NI calculation, payroll compliance or payroll outsourcing, Acenteus Accounting provides accurate employer NI calculation, compliance with PAYE deadlines and correct claiming of Employment Allowance for UK employers.
Frequently Asked Questions (FAQ)
The employer Class 1 NI rate is 15 per cent on earnings above the Secondary Threshold of £5,000 per year for 2026/27.
The Secondary Threshold is £5,000 per year (£96 per week, £417 per month) for 2026/27.
The rate increased from 13.8 per cent to 15 per cent and the Secondary Threshold decreased from £9,100 to £5,000, increasing employer NI costs for most employers.
It depends on your employer NI liability in the previous tax year and your business structure. Eligible employers with liability under £100,000 can claim up to £10,500.
You claim Employment Allowance through your payroll software. The software will apply the allowance against your monthly employer NI liability.
Employer NI is calculated on gross salary, not net salary. Gross salary is before any deductions such as income tax or employee NI.
Yes, employer NI is payable on all earnings above the Secondary Threshold, including bonuses, commission, overtime and certain benefits in kind.
Employer NI is only payable on salary, not on dividends. If a director takes only dividends and no salary, no employer NI is payable.
Underpayment can lead to interest, penalties and compliance action by HMRC. Accurate calculation and timely payment are essential.
Yes, outsourcing payroll to a specialist provider can reduce errors, ensure correct calculations and help claim Employment Allowance correctly, reducing exposure to overpayments or underpayments.
