Employer National Insurance Calculator
Calculate employer National Insurance contributions. See monthly and annual breakdown of Class 1 secondary NICs for your employees.
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Understanding Employer National Insurance
What is Employer National Insurance?
Employer National Insurance Contributions (NICs) are a tax that employers pay on top of an employee's salary. Unlike employee NICs which are deducted from the worker's pay, employer NICs are an additional cost to the business. For the 2025/26 tax year, the rate is 15% on all earnings above the secondary threshold of £5,000 per year. There is no upper limit, meaning the 15% rate applies to all earnings above the threshold.
The Secondary Threshold
The secondary threshold is the point at which employer NICs become payable. For 2025/26, this is set at £5,000 per year (£96.15 per week or £416.67 per month). Employers do not pay NICs on the portion of an employee's earnings below this threshold. The threshold is reviewed and potentially adjusted each year in the government's Budget.
Employment Allowance
Eligible employers can claim the Employment Allowance, which reduces their annual employer NICs bill by up to £10,500 (2025/26). This is particularly beneficial for small businesses. However, companies where a director is the sole employee paying themselves above the secondary threshold are not eligible. The allowance is claimed through your payroll software.
Impact on Hiring Costs
Employer NICs represent a significant additional cost of employment beyond the headline salary. For an employee earning £35,000, the employer NICs add approximately £4,500 to the total cost. This is why the true cost of an employee is always higher than their salary — and why understanding employer NICs is essential for budgeting and workforce planning.
Exemptions and Reduced Rates
Certain categories of employees attract reduced or zero employer NICs. These include employees under 21 (zero rate up to £50,270), apprentices under 25 (zero rate up to £50,270), and employees working in freeport tax sites. Veterans in their first year of civilian employment also have a zero rate up to £50,270. These reliefs are applied automatically through compliant payroll software.
Employer NI FAQ
Is employer NI different from employee NI?
Yes. Employee NI is deducted from the employee's pay and reduces their take-home salary. Employer NI is an additional cost paid by the employer on top of the salary — it does not reduce the employee's pay. The rates and thresholds are also different: employer NI is 15% above £5,000, while employee NI is 8% between £12,570 and £50,270, then 2% above that.
Do I pay employer NI on pension contributions?
No. Employer pension contributions are exempt from employer NICs. This is one reason salary sacrifice pension arrangements are popular — when an employee sacrifices salary for an increased employer pension contribution, both the employee and employer save on National Insurance.
How is employer NI paid to HMRC?
Employer NICs are calculated and reported through your payroll. They are paid to HMRC along with employee NICs and PAYE income tax, usually monthly (or quarterly for small employers). Most payroll software calculates employer NICs automatically.
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