Definition
The earnings level above which employers must start paying employer's National Insurance contributions. Earnings at or below this threshold are not subject to employer NICs.
UK Context
For 2025/26, the Secondary Threshold is 5,000 pounds per year (96.15 pounds per week). This was reduced from 9,100 pounds in the previous year. Employers pay 15% NIC on all earnings above this threshold. The threshold is set annually by the government and announced in the Budget or Autumn Statement.
Best Practices
- Update payroll systems promptly when threshold changes are announced
- Factor threshold changes into annual employment cost budgets
- Consider the impact of threshold changes on the cost of hiring additional staff
Frequently Asked Questions
What happens when earnings exceed the Secondary Threshold?
The employer must pay 15% NIC on all earnings above the Secondary Threshold. There is no upper limit on employer NIC; it continues at 15% on all earnings above the threshold.
Is the Secondary Threshold different from the Primary Threshold?
Yes. The Secondary Threshold is the level at which employer NICs begin. The Primary Threshold is the level at which employee NICs begin. They are set at different amounts: 5,000 pounds and 12,570 pounds respectively for 2025/26.