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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Rachel Richardson
Head of Growth & Marketing, Grove HR
Rachel leads growth and marketing at Grove HR, with over a decade of experience in UK HR technology. She writes practical guides to help small businesses navigate employment law and build better workplaces.
Frequently Asked Questions
What is the employer NI rate for 2026/27?
The employer National Insurance rate for 2026/27 is 15% on employee earnings above the secondary threshold of £5,000 per year (£417 per month). This rate was increased from 13.8% in April 2025.
What is the Employment Allowance?
Employment Allowance is a relief that reduces your employer NI liability by up to £10,500 per year. Most employers qualify, but companies whose sole employee is a director, public bodies, and connected companies already claiming cannot use it.
Do I pay employer NI on pension contributions?
No. Employer pension contributions are not subject to employer NI. Additionally, if employees make pension contributions via salary sacrifice, both employer and employee save NI on the sacrificed amount.
Is employer NI deducted from employee pay?
No. Employer NI is a cost borne entirely by the employer, paid in addition to the employee gross salary. It is not deducted from the employee payslip.
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