Employer National Insurance Rates 2026/27

Employer Class 1 National Insurance (secondary contributions) is charged at 15% on an employee's earnings above the secondary threshold of £5,000 per year. That works out at roughly £96 per week or £417 per month, and payroll software applies the threshold per pay period rather than as one annual lump.

Unlike employee NI, there is no upper earnings limit for employers. The 15% rate applies to all earnings above the threshold, however high the salary — there is no equivalent of the £50,270 upper earnings limit that caps the employee rate. These figures are set by HMRC and confirmed on GOV.UK for the 2026/27 tax year, which runs from 6 April 2026 to 5 April 2027.

The 2026/27 Class 1 employer rates at a glance:

The under-21, apprentice and veteran rates are set to 0% up to the upper secondary threshold of £50,270 in 2026/27, in line with the upper earnings limit for employee NI. They use different NI category letters — set the right letter at onboarding or the rate will not apply.

To work out employer NI for an employee, follow these steps for each pay period.

• Step 1. Work out the employee's gross pay for the period — salary, wages, bonuses, overtime, statutory payments, and any other NI-able earnings.
• Step 2. Subtract the secondary threshold for that period — £417 per month or £96 per week (or pro-rate for any other pay frequency).
• Step 3. Multiply the remaining amount by 15%.
• Step 4. Add the result to your payroll liability and report it to HMRC through RTI (Real Time Information).

For a quick check across your whole team, use the employer NI calculator rather than working each payslip out by hand. It applies the 2026/27 rates and shows monthly as well as annual figures.

Take an employee aged 21 or over earning £30,000 a year, paid monthly.

• Annual employer NI: £30,000 minus the £5,000 secondary threshold = £25,000 liable. £25,000 × 15% = £3,750 per year.
• Monthly employer NI: gross pay of £2,500 minus the £417 monthly threshold = £2,083.33 liable. £2,083.33 × 15% = £312.50 per month.

That £3,750 sits on top of the gross salary, so the true cost of employing this person is £33,750 before pension contributions and other overheads. The employee cost calculator adds these together for you.

This table assumes the employee is over 21 and not on an apprentice or freeport schedule. The threshold is per employee, so smaller employers can fall under the £5,000 mark for several members of staff at the start of the year and pay no employer NI on them at all.

Eligible employers can claim the Employment Allowance, which reduces their total employer Class 1 NI liability by up to £10,500 per tax year. For many small businesses with a handful of staff on typical salaries, this wipes out the employer NI bill entirely.

You can usually claim if your total employer NI liability was under £100,000 in the previous tax year and you are a business or charity with at least one employee or two directors. Companies where the only employee is a director cannot claim. You claim through your payroll software via an Employer Payment Summary (EPS). Check the full eligibility rules on GOV.UK before claiming.

For the full eligibility rules and the claim process, see the Employment Allowance guide.

Employer NI applies to most cash earnings and cash-like pay, including:

• Salaries and wages
• Overtime, bonuses and commission
• Statutory Sick Pay, Statutory Maternity Pay and other statutory payments
• Tips and gratuities paid through the employer

It does not generally apply to genuine employer pension contributions, which is why salary sacrifice pension arrangements reduce the employer NI bill as well as the employee's. The salary sacrifice pension calculator shows the combined saving.

Dividends paid to directors are outside NI. HMRC treats salary and dividends very differently, so take advice before restructuring pay. If you manage a limited company and are weighing the two, the IR35 calculator sets out the deemed-payment treatment for inside-IR35 engagements.

Not every employee uses the standard category letter A. HMRC provides different category letters with different secondary thresholds for certain groups, including employees under 21, apprentices under 25, qualifying armed forces veterans and eligible freeport workers. For most of these groups, employer NI is effectively 0% up to a much higher upper secondary threshold, with the standard 15% rate only above it.

Assigning the wrong category letter is a common and costly payroll error. Check each new starter's circumstances against the category letter guidance on GOV.UK and keep evidence, such as proof of age or apprenticeship status, on file.

Employer NI is not just Class 1. Employers also pay:

• Class 1A at 15% on the value of most taxable benefits in kind reported on form P11D (cars, health insurance, accommodation, etc.). Class 1A is paid annually via the P11D(b) form, not through RTI.
• Class 1B at 15% on the grossed-up value of items covered by a PAYE Settlement Agreement (PSA).

For company cars, the company car tax calculator works out the BIK value, and the 15% Class 1A charge is applied to that value on top. For benefits generally, the P11D calculator shows the combined employee-tax and Class 1A cost.

The errors HMRC sees most often from small employers are:

• Forgetting to claim the Employment Allowance, or claiming it when ineligible.
• Using last year's thresholds in a manual payroll calculation.
• Applying the annual £5,000 threshold in one go instead of per pay period.
• Using the wrong NI category letter for under-21s or apprentices.
• Missing employer NI on bonuses, which are NI-able in the period they are paid.
• Ignoring Class 1A on benefits — a £10,000 car benefit adds £1,500 of employer NI on the P11D(b).

Most of these disappear if you use recognised payroll software that updates thresholds automatically each April, and reconcile your liability against your HMRC account each quarter.

Employer NI is only one part of what a hire really costs. Alongside the 15% secondary contributions, budget for workplace pension contributions under auto-enrolment (3% employer minimum), statutory payments such as SSP and SMP, holiday pay on 5.6 weeks of statutory leave, and the National Living Wage, which is £12.71 per hour for workers aged 21 and over from 1 April 2026.

A sensible rule of thumb is that an employee costs noticeably more than their gross salary once these are added. Before making an offer, run the full figure through the employee cost calculator so there are no surprises in your first year of employment. The how much does it cost to employ someone guide takes the calculation a step further with overheads.

The 2026/27 figures are unchanged from 2025/26, which is the second year in a row the main rates have been held. The main 15% rate, the £5,000 secondary threshold, the £10,500 Employment Allowance, and the £50,270 upper secondary threshold for under-21s and apprentices all carry over from 2025/26.

The 2024/25 rate was also 15% above the £5,000 secondary threshold, but the upper secondary threshold for under-21s and apprentices was then £50,270. Before 2022/23, the employer rate was 13.8% and the threshold was £9,100 — the current figures represent a 1.2 percentage-point increase on the rate and a £4,100 reduction in the threshold, the combined effect of which materially raised employer NI.