Quick Answer: What is the Employer NI Rate?
Employer National Insurance rate for 2026/27 is 15% on employee earnings above the secondary threshold of £5,000 per year (£417 per month).
| Parameter | 2026/27 Rate |
|---|---|
| Employer NI rate | 15% |
| Secondary threshold (annual) | £5,000 |
| Secondary threshold (monthly) | £417 |
| Employment Allowance | £10,500 |
How Employer NI Works
Employer National Insurance Contributions (NICs) are a tax on employment paid by the employer — not deducted from the employee's pay. They are paid to HMRC alongside PAYE.
The Calculation
Employer NI = (Employee earnings - Secondary threshold) × 15%
Example: Employee earning £35,000/year
- Annual earnings above threshold: £35,000 − £5,000 = £30,000
- Annual employer NI: £30,000 × 15% = £4,500
- Monthly employer NI: £4,500 ÷ 12 = £375
Use our employer NI calculator for instant calculations.
The Secondary Threshold
The secondary threshold is the point at which employer NI begins. For 2026/27:
| Threshold | Amount |
|---|---|
| Annual | £5,000 |
| Monthly | £417 |
| Weekly | £96 |
Comparison with Previous Years
| Tax Year | Rate | Secondary Threshold |
|---|---|---|
| 2024/25 | 13.8% | £9,100 |
| 2025/26 | 15% | £5,000 |
| 2026/27 | 15% | £5,000 |
The combined effect of the higher rate and lower threshold significantly increased employer costs from April 2025.
Employment Allowance
The Employment Allowance reduces your employer NI bill by up to £10,500 per year.
Who Qualifies?
Most employers qualify. You cannot claim if:
- Your sole employee is a director
- You are a public body or funded primarily by government
- You carry out functions of a public nature
- You are a "connected company" already claiming through another entity
Employer NI for Different Employee Types
| Employee Type | Employer NI Rate | Notes |
|---|---|---|
| Standard employee | 15% above £5,000 | Standard rate |
| Employee under 21 | 0% up to £50,270, 15% above | Reduced rate for young workers |
| Apprentice under 25 | 0% up to £50,270, 15% above | Reduced rate for apprentices |
| Armed Forces veteran (first 12 months) | 0% up to £50,270, 15% above | First civilian job relief |
Under-21 and Apprentice Relief
If you employ workers under 21 or apprentices under 25, you pay 0% employer NI on earnings up to the Upper Secondary Threshold (£50,270).
Managing Employer NI Costs
Strategies to Reduce Your NI Bill
| Strategy | Saving | Complexity |
|---|---|---|
| Claim Employment Allowance | Up to £10,500/year | Low |
| Salary sacrifice pension | NI saved on sacrificed amount | Medium |
| Salary sacrifice benefits (cycle to work, childcare) | NI saved on sacrificed amount | Medium |
| Hire under-21s or apprentices | 0% NI up to £50,270 | Low |
Salary Sacrifice and NI
When an employee sacrifices salary for benefits (e.g., pension contributions, cycle to work), both the employee and employer save NI on the sacrificed amount:
Example: Employee sacrifices £5,000 for pension
- Employer NI saving: £5,000 × 15% = £750 per year per employee
Employer NI in Context: Total Employment Costs
Employer NI is one component of the total cost of employing someone. For a full breakdown, see our guide on the true cost of hiring an employee.
Quick Comparison: £30,000 Salary Employee
| Cost Component | Annual Cost |
|---|---|
| Gross salary | £30,000 |
| Employer NI (15% above £5,000) | £3,750 |
| Pension (3% minimum) | £900 |
| Total minimum employer cost | £34,650 |
Use our employer cost calculator for detailed breakdowns.
Tracking Employer NI with Grove
Grove helps you understand and forecast employer NI costs:
- Per-employee NI calculations visible on employee profiles
- Total employer cost reports including NI, pension, and other contributions
- Employment Allowance tracking showing remaining allowance
- Forecasting tools for budgeting new hires
Use our free employer NI calculator or get started with Grove.
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The Grove Team
Grove HR
The Grove Team writes about HR best practices, compliance, and workplace culture for Grove. Helping UK businesses cultivate thriving teams.
