What is the Employment Allowance and do I qualify?

Employment Allowance reduces your Employer NIC bill by up to £10,500 per tax year (from 2025/26). Most small and medium-sized businesses qualify, as long as your total Employer NIC bill was less than £100,000 in the previous tax year. You cannot claim if your only employee is a director.

Has the Employer NIC rate changed recently?

Yes. From April 2025, the Employer NIC rate increased from 13.8% to 15%, and the secondary threshold was reduced from £9,100 to £5,000 per year. This significantly increased employment costs for most UK businesses. The calculator uses the correct rate for whichever tax year you select.

Can Experlu help me register for PAYE and run payroll?

Yes. Experlu offers fixed-price payroll services — including PAYE registration, monthly RTI filings, payslips, and year-end P60s. You can choose a one-off service or an ongoing monthly package. Use the options above to find the right fit, or get in touch for a tailored quote.

← All calculatorsEMPLOYER NI CALCULATOR

Estimate the cost of employing someone

Q: How is Employer National Insurance calculated?

Employer NIC is charged at 13.8% on earnings above the secondary threshold (£5,000 per year in 2025/26). So for a salary of £30,000, you'd pay 13.8% on £25,000 — giving an employer NI bill of £3,450. The calculator above does this automatically for any salary and tax year.

Q: Is Employer NIC the same as PAYE?

No — they're related but different. PAYE (Pay As You Earn) is the system HMRC uses to collect Income Tax and employee NIC from employees' wages. Employer NIC is a separate tax paid by the employer on top of the gross salary. Both are reported and paid through PAYE, but Employer NIC is an additional cost that doesn't reduce the employee's take-home pay.

Q: Does Employer NIC apply to part-time or temporary workers?

Yes, but only on earnings above the secondary threshold. If a part-time or temporary worker earns less than £5,000 per year (2025/26), no Employer NIC is due. For earnings above that threshold, the standard rate applies regardless of the type of contract.

See the likely employer National Insurance and total employment cost before you hire.

Your result

Your Employer NI result, explained

See the rate, threshold and allowance behind the number from the calculator above.

15%Standard employer NI rateFor a standard category A employee in 2026/27.

£5,000Annual secondary thresholdEquivalent to £96 a week or £417 a month.

Not included in your result

Up to £10,500Employment AllowanceThis follows the Employment Allowance choice made in the calculator.

How it was calculated

Without Employment Allowance applied

Employment Allowance off

Annual salary£0

−

Secondary threshold£5,000

Earnings subject to NI£0

Employer NI rate15%

Gross Employer NI£0

Employment Allowance not applied

Gross Employer NI£0

Employer NI after allowance£0

Total employment cost£0

Employment Allowance is an employer-level relief. The amount available depends on the business and how much allowance has already been used across its payroll.

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Employer NI at a glance

Four points worth knowing

When it starts

Standard employer NI starts above the secondary threshold. In 2026/27 that is £96 a week, £417 a month or £5,000 a year.

How much

The standard category A employer rate is 15%. Special NI categories can change the amount.

When you pay

Monthly PAYE is normally due electronically by the 22nd of the following tax month.

Possible relief

Employment Allowance can reduce eligible employers' annual Class 1 NIC by up to £10,500.

Employer NIC guide

The rules behind the calculator

The calculator gives the number. These sections explain what can change it.

What is Employer National Insurance?

Employer National Insurance is a payroll cost paid by the employer. It is separate from the National Insurance deducted from an employee's pay.

For most employees, the employer contribution is secondary Class 1 NIC. In 2026/27, the standard rate is 15% on earnings above the secondary threshold. Payroll software normally calculates the liability each pay period.

Class 1, Class 1A and Class 1B

Employer NIC is not a single charge. The class depends on what is being paid or provided.

Type	Usually applies to	2026/27	How it is dealt with
Class 1	Most employee earnings	15% employer rate for a standard category A employee	Reported and paid through payroll
Class 1A	Most taxable benefits and certain other payments	15% for 2026/27	Usually reported after the tax year and paid by 22 July
Class 1B	Items covered by a PAYE Settlement Agreement	15% for 2026/27	PSA tax and Class 1B NIC are normally due by 22 October electronically

Employment Allowance

Employment Allowance can reduce an eligible employer's annual Class 1 NIC bill by up to £10,500 in 2026/27. It is claimed through payroll and continues until the allowance is used or the tax year ends.

1Check the employer

Businesses, charities and some public bodies can qualify. Public-sector restrictions apply.

2Check the exclusions

A one-director company cannot claim if that director is the only employee liable for secondary Class 1 NIC.

3Check the group and payroll

Connected companies can make one claim across the group. The allowance can only be claimed against one payroll.

The old £100,000 cap has gone.

From April 2025, employers are no longer excluded from current-year Employment Allowance solely because their previous Class 1 NIC bill exceeded £100,000.

PAYE and payment deadlines

Most Employer NIC is reported through payroll. The payment date depends on the type of liability.

Each paydayRun payroll and send RTI

Report employee pay and deductions through your payroll process.

22ndMonthly PAYE payment

Electronic monthly PAYE payments are normally due by the 22nd of the next tax month.

6 JulyP11D and P11D(b)

Report relevant expenses, benefits and Class 1A NIC after the tax year.

22 JulyPay Class 1A NIC

Electronic payment deadline for Class 1A NIC on reportable benefits.

22 OctoberPay PSA tax and Class 1B NIC

Electronic payment deadline for a PAYE Settlement Agreement.

Benefits, expenses and P11D

Taxable benefits can create Class 1A NIC even when no extra cash salary is paid. Employers may need to report benefits through payroll or on P11D forms, depending on how the benefit is handled.

For benefits reported after the tax year, the P11D and P11D(b) deadline is normally 6 July. Class 1A NIC is normally due electronically by 22 July.

PAYE Settlement Agreements

A PAYE Settlement Agreement lets an employer make one annual payment for certain minor, irregular or impracticable benefits and expenses. The resulting Class 1B NIC is 15% for 2026/27. Electronic payment is normally due by 22 October after the tax year.

Employer responsibilities

Deduct employee Income Tax and primary Class 1 NIC where due.
Calculate employer secondary Class 1 NIC.
Send RTI submissions on time.
Pay the PAYE bill by the relevant deadline.
Keep payroll and benefits records.
Complete year-end benefits reporting where required.

Special NI categories

The standard 15% rate does not tell the whole story. Some NI category letters give employers a 0% rate up to a higher threshold if the employee and job meet the conditions.

Category	Typical situation	What changes
M	Employee under 21	Employer NIC can be 0% up to the upper secondary threshold, subject to the category rules.
H	Apprentice under 25	Employer NIC can be 0% up to the apprentice upper secondary threshold if the conditions are met.
V	Qualifying veteran	A 0% employer rate can apply up to the veterans upper secondary threshold for the qualifying period.
F / I / L / S	Freeport categories	Special 0% employer bands can apply before the Freeport upper secondary threshold.
D / E / K / N	Investment Zone categories	Special 0% employer bands can apply before the Investment Zone upper secondary threshold.

Category eligibility can be detailed. Use the correct NI category in payroll rather than applying a reduced rate manually.

Worked examples

See the numbers at different salaries

Examples use a standard employee and assume the full £10,500 Employment Allowance is still available.

Annual salary	Earnings above £5,000	Gross Employer NI	Allowance applied	Employer NI payable	Total employment cost
£30,000	£25,000	£3,750	− £3,750	£0	£30,000
£50,000	£45,000	£6,750	− £6,750	£0	£50,000
£80,000	£75,000	£11,250	− £10,500	£750	£80,750

Common questions

Frequently asked questions

Quick answers to the points employers ask most often.

How is Employer National Insurance calculated in 2026/27?

For a standard category A employee, the employer rate is 15% on earnings above the secondary threshold. The 2026/27 secondary threshold is £96 a week, £417 a month or £5,000 a year. Payroll normally applies the threshold for the employee’s pay period.

What is Employment Allowance and who can claim it?

Employment Allowance can reduce an eligible employer’s annual Class 1 National Insurance liability by up to £10,500 in 2026/27. Important restrictions apply. For example, a company with one director cannot claim if that director is the only employee liable for secondary Class 1 NIC. Connected companies can only make one claim across the group, and an employer with more than one payroll can only claim against one payroll.

Is there still a £100,000 Employer NIC limit for Employment Allowance?

No. From April 2025, the previous £100,000 Class 1 NIC eligibility cap was removed for current-year claims. Other eligibility rules still apply.

Is Employer NIC the same as PAYE?

No. PAYE is the system used to report and collect payroll taxes and deductions. Employer NIC is a separate cost paid by the employer. It is normally reported and paid to HMRC through the PAYE process.

Do directors pay Employer National Insurance?

Directors can be liable for Class 1 National Insurance on salary and bonuses. Director NIC uses annual earnings rules, although an alternative method can be used during the year with a final annual check.

Does Employer NIC apply to part-time or temporary workers?

It can. The answer depends on the employee’s earnings in each pay period and their NI category. A short contract or part-time role does not by itself remove Employer NIC.

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