Employers NI Rates 2025/26: Thresholds & Calculator Guide

If you run a UK payroll, the 2025/26 tax year brought a sharp increase in what you pay to the Treasury for every employee on your books. The standard employer National Insurance rate jumped to 15% in April 2025, and the earnings threshold employers start paying from fell to £5,000 a year — a double shift that changes the cost picture for businesses of every size. This guide walks you through exactly what changed, which thresholds apply, and how to work out what you’ll owe for 2025/26.

Employer NI rate from April 2025: 15% · Previous employer NI rate: 13.8% · Secondary threshold 2025/26: £5,000 · Class 1A rate on benefits: 15% · Employment Allowance 2025/26: £10,500

What are employers NI rates for 2025/26?

From 6 April 2025, the standard employer Secondary Class 1 National Insurance contribution rate rose to 15% — a 1.2 percentage point increase from the previous rate of 13.8%. This applies to earnings above the Secondary Threshold for most contribution categories including A, B, and J, as published by GOV.UK (official employer rates and thresholds). The change affects not just cash earnings but also benefits in kind and PAYE Settlement Agreements, meaning Class 1A and 1B NICs also sit at 15% for 2025/26.

Secondary Class 1 contributions

The Secondary Threshold dropped sharply from £9,100 annually (£175 per week) to £5,000 annually (£96 per week) on the same date. This lower starting point means employers begin paying 15% on more of each employee’s earnings from the first pound above £5,000. According to GOV.UK official NIC rates publication, this weekly figure of £96 translates to £417 per month for payroll purposes. The threshold is the same across England and Northern Ireland, though the cap removal on Employment Allowance resolves prior state aid complications for Northern Ireland employers.

Class 1A on benefits

Employers providing benefits in kind — such as company cars, health insurance, or travel loans — pay Class 1A NIC at the same 15% rate on the cash value of those benefits. This also applies to items settled under a PAYE Settlement Agreement. As Deloitte TaxScape analysis notes, the rate increase flows directly through to any benefits-in-kind calculation your payroll runs.

How much NI do employers pay in the UK?

The impact varies significantly depending on how much your employees earn. For an employee on the UK median salary of £36,036, Deloitte TaxScape calculated that employer NICs rise 25%, from around £3,715 to £4,655 per year. The hit is steeper for lower-paid staff: an employee earning £20,000 sees employer NICs jump 50%, from £1,504 to £2,250 annually. At the higher end, an earner on £100,000 faces a 14% increase, from £12,544 to £14,250.

Rates above secondary threshold

The 15% rate applies to all earnings above the Secondary Threshold — there is no tapering or cap for standard employees. The Lower Earnings Limit sits at £6,500 for 2025/26, meaning employees below that level generate no refundable NIC credits, while employers still owe nothing until the £5,000 Secondary Threshold is cleared. The Upper Earnings Limit, which matters for employee NIC but not employer contributions, is £50,270 per year.

Employment Allowance offset

The £10,500 Employment Allowance — up from £5,000 — lets eligible employers reduce their secondary Class 1 NIC bill by that amount each year. ICAEW analysis confirms there is no carry-forward if the allowance exceeds the NIC bill in any given year. Crucially, the previous £100,000 eligibility cap has been removed for 2025/26, meaning larger employers can now claim the allowance too.

How to calculate employer NI?

The basic formula is straightforward: subtract the Secondary Threshold from your employee’s annual earnings, then multiply by 15%. For a monthly payroll, you apply the same logic using the monthly threshold equivalent (£417). Any unused Employment Allowance reduces the total bill across your entire payroll before HMRC is paid.

Step-by-step calculation

1. Establish annual earnings: Take the employee’s total gross pay for the tax year, including salary, bonuses, and any cash benefits subject to Class 1.
2. Subtract the Secondary Threshold: £5,000 is the annual figure; earnings below this generate zero employer NIC.
3. Multiply the excess by 15%: This gives the employer NIC liability before any allowance.
4. Deduct Employment Allowance: Apply your £10,500 allowance against the total payroll NIC bill — not per employee — before payment.
5. Report via RTI: Submit Class 1 NIC amounts through Real Time Information each pay period.

Thresholds and exemptions

Certain employees remain exempt or subject to a higher Secondary Threshold. Under-21s, apprentices under 25, and armed forces veterans qualify for an upper Secondary Threshold of £50,270 per year before the 15% rate kicks in. Freeports and Investment Zones also carry a preferential upper Secondary Threshold of £25,000 annually. Deloitte TaxScape confirms these exemptions remain in place alongside the new rates.

What are the rates and thresholds for employers 2025 to 2026?

The Autumn Budget 2024, announced in October 2024, set out the framework that took effect on 6 October 2024. According to GOV.UK (official employer rates guidance), the key figures for England and Northern Ireland are as follows:

Changes from 2024/25

The two most significant shifts from 2024/25 are the rate rise from 13.8% to 15% and the threshold reduction from £9,100 to £5,000 annually. The Employment Allowance also increased from £5,000 to £10,500 with no upper limit. According to Littler employment law analysis, the Secondary Threshold is legislated to remain fixed at £5,000 until 6 April 2028, after which it becomes CPI-linked.

Is National Insurance still 8%?

No — and this is a point of frequent confusion. The 8% rate that appears in employee NIC discussions refers to the employee’s Class 1 contribution between £12,571 and £50,270, and it has no direct connection to employer NIC. The employer rate is entirely separate and was 13.8% before rising to 15% from April 2025.

Employee vs employer rates

Employee NIC operates on a different schedule: 0% on earnings up to the Primary Threshold of £12,570, then 8% on the next £37,700, and 2% above that. Employer NIC, by contrast, applies at a flat 15% above the Secondary Threshold with no upper band. GOV.UK official rates maintains separate tables for each contribution class.

Recent Budget updates

The Autumn Budget 2024 specifically targeted employer contributions, not employee rates. The employee 8% band remains unchanged for 2025/26. According to CIPP payroll professional guidance, the April 2025 changes were introduced to Parliament via the National Insurance Contributions Bill, with 940,000 employers facing higher NIC bills as a result.

The Chancellor has today announced that the standard rate of employer national insurance contributions will be increasing from 13.8% to 15.0% with effect from 6 April 2025. For those seeking further information on financial support, you can find details on the September 2025 inflation relief payment.

— Deloitte TaxScape (tax advisory firm analysis)

940,000 employers to pay more NIC in 2025/26.

— ICAEW (professional accountancy body)

The change will have a higher impact for employers in low-wage sectors such as hospitality, retail, leisure or care.

— Deloitte TaxScape (tax advisory firm analysis)

For UK payroll managers and finance directors, the message is blunt: the 2025/26 changes demand a full recalculation of your employment cost base, not just a plug figure into existing formulas. The Employment Allowance helps offset some of the increase, but businesses that previously sat near the £100,000 cap may find the expanded allowance now available to them — worth checking if you’re one of them. Low-wage employers, particularly in hospitality and care, should model the threshold reduction impact separately from the rate increase, since the former accounts for a significant share of the cost rise on modest salaries.

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Employers planning payroll for 2025/26 should align NI calculations with the broader 2025/26 UK tax thresholds and NI rates that detail income tax bands alongside updated contributions.

Frequently asked questions