Employers NI Calculator

This calculator uses the standard annual employer National Insurance formula for a category A employee in the 2026/27 tax year. It is designed for budgeting, comparing salaries and checking the broad payroll cost before you run the exact pay-period calculation in payroll software.

The result is shown before Employment Allowance because that allowance belongs to the employer's whole annual NI bill, not to one employee. If the employee is under 21, an apprentice under 25, a qualifying veteran, or a Freeport or Investment Zone employee, different upper secondary thresholds can reduce the employer NI due.

Employer NI is the employer's Class 1 secondary National Insurance contribution. It is paid by the business to HMRC on top of the employee's gross pay, so it does not reduce the employee's take-home pay. Employees also pay their own Class 1 National Insurance through PAYE, but that is a separate deduction from wages. For hiring budgets, employer NI is one of the first costs to add to salary because a £30,000 salary is not a £30,000 payroll cost once secondary NIC is included.

For 2026/27, the standard employer NI rate is 15% on earnings above the £5,000 annual secondary threshold. GOV.UK also lists the threshold as £96 per week or £417 per month, which is how payroll software normally applies it during weekly or monthly payroll runs. There is no upper earnings limit for standard employer NI, so the 15% rate continues above £50,270 and on higher salaries. This calculator annualises the same rule so you can estimate the cost quickly before payroll is processed.

The examples below use the standard 2026/27 formula before Employment Allowance. They show why employer NIC matters most once pay moves beyond the £5,000 threshold. On a £20,000 salary, the employer pays NI on £15,000 of earnings. On a £50,000 salary, the liable earnings rise to £45,000. The total cost column includes salary plus employer NI only, so add workplace pension contributions separately when you need a fully loaded employment cost.

The Employment Allowance can reduce an eligible employer's annual National Insurance bill by up to £10,500 in 2026/27. It is claimed against the employer's total Class 1 secondary NI liability, not attached to a single salary. That is why this calculator shows the before-allowance cost for one employee. A small employer may have the actual cash payment to HMRC reduced to zero until the allowance is used up, while a larger payroll may use the allowance quickly and then pay employer NI in full for the rest of the tax year.

Not every employee uses the standard employer NI rule. GOV.UK gives higher upper secondary thresholds for employees under 21, apprentices under 25 and qualifying veterans, usually £50,270 per year for 2026/27. Freeport and Investment Zone employees can also have a £25,000 upper secondary threshold. These categories can make employer NI zero up to the relevant threshold, then 15% above it. Use the correct NI category letter in payroll because this calculator assumes the standard category A treatment unless you adjust the salary comparison manually.

For ordinary employees, payroll software calculates employer NI by pay period. Directors are different because National Insurance is normally assessed on an annual earnings period, so the annual threshold is applied cumulatively across the tax year. Bonuses, overtime and commission are normally earnings for Class 1 NI, so they can increase the employer's secondary contribution in the period they are paid. If you are modelling a bonus, add it to annual salary to see the approximate extra employer NI before payroll applies the exact period rules.

Employer NI and employee NI are easy to confuse because both appear inside payroll, but they answer different questions. Employee NI is deducted from gross pay and affects take-home pay. Employer NI is paid by the employer in addition to gross pay and affects hiring cost. In 2026/27, employee NI uses the primary threshold and upper earnings limit, while standard employer NI uses the lower £5,000 secondary threshold and has no upper cap. Use the take-home pay calculator for employee-side deductions and this calculator for employer-side cost.

The cleanest ways to reduce employer NI are structural and must still follow payroll rules. Claim Employment Allowance if eligible, consider salary sacrifice pension where the employee genuinely exchanges salary for employer pension contributions, and check whether young worker, apprentice, veteran, Freeport or Investment Zone categories apply. Salary sacrifice can reduce NI-able pay for both employer and employee, but it must be documented properly and cannot take pay below the National Minimum Wage. Do not deduct employer NI from wages or disguise normal salary as something else.

Enter the annual gross salary to estimate the employer's National Insurance for a standard UK employee in 2026/27. The calculator applies 15% above the £5,000 secondary threshold, then shows the annual amount, monthly equivalent and total salary plus NI cost. Use the result as a quick hiring or budgeting estimate, then check Employment Allowance, pension contributions and any special NI category before treating the figure as the final payroll liability.