Calculate employer NI contributions at the new 15% rate from April 2025, with the reduced £5,000 secondary threshold.
By Konstantin Iakovlev · Founder, Calks.uk
Last updated: · Verified against HMRC and GOV.UK 2026/27 rates
Rates verified: 28 September 2026
Quick Answer
Employer NI (Class 1 secondary) in 2026/27 is 15% on earnings above the £5,000 Secondary Threshold (down from £9,100 in 2024). Employment Allowance of £10,500 can reduce your annual bill if eligible.
Disclaimer
This calculator is for guidance only. It is not financial or tax advice: check anything you rely on against the official source or a qualified adviser. Rates and figures come from HMRC and GOV.UK and are reviewed for the 2026/27 tax year. Everything is calculated in your browser; nothing you enter is sent to our servers.
How It Works
From April 2025, employer National Insurance increased to 15% (up from 13.8%) and the secondary threshold was reduced to £5,000, down from £9,100. Both changes came out of the Autumn 2024 Budget, and together they mean employers now pay NI on a significantly larger portion of each employee's salary. For someone on £30,000 the charge falls on the £25,000 above the threshold, giving £3,750 a year against £2,884.20 under the old rules, an increase of £865.80 per head. Across a workforce earning £40,000 or more the combined effect is close to £900 per employee.
The Employment Allowance for 2026/27 is £10,500, and it offsets your employer NI bill rather than changing the rate you pay. Most businesses are eligible. The old £100,000 employer-NI eligibility cap, in place since April 2020, was abolished from 6 April 2025, so there is no longer any upper limit on who can claim, and the allowance itself rose from £5,000 at the same time as a partial offset for very small employers.
Qualifying turns on two tests. You must be operating a trade or business, which excludes the public sector unless a specific exemption applies, and you need at least one employee other than the director, or two directors who both earn above the Secondary Threshold. The main exclusion is a company with a single director and no other employees.
Salary sacrifice is one of the few arrangements that pays both sides. When an employee gives up £1,000 of salary into a pension, an EV scheme or cycle-to-work, the employer saves 15% NI, so £150, and avoids the 0.5% Apprenticeship Levy on a large payroll, another £5. The employee saves income tax at 20% to 45% and employee NI at 8% or 2%, so the combined saving can exceed 40% to 50% for every £1 sacrificed. Many employers share part of their own saving back as an additional pension contribution.
Budgeting for a hire means looking well past the salary line. True employment cost is gross pay, plus employer NI at 15% on everything over £5,000, plus auto-enrolment pension at a minimum of 3% on earnings between £6,240 and £50,270, plus the 0.5% Apprenticeship Levy once total pay passes £3m. Holiday pay is already inside the salary unless you are using agency staff, and then come the benefits: private health cover, life assurance, a gym membership, an EV scheme. On a £40,000 salary the real figure typically lands between £45,000 and £47,000.
This calculator shows the cost per employee and lets you estimate the impact of the April 2025 changes compared to the previous year's rates. Run each salary you are actually considering rather than a single average, because the threshold is a flat £5,000 whatever the role pays, and the allowance is applied to your total bill rather than to any one person's earnings.
Example: Employee earning £30,000
- Earnings above secondary threshold: £30,000 − £5,000 = £25,000
- Employer NI at 15%: £25,000 × 0.15 = £3,750 per year
- Previous year (13.8%, £9,100 threshold): £2,884.20
- Annual increase: £865.80 per employee
Frequently Asked Questions
- Why did employer National Insurance rise in April 2025?
- The Autumn 2024 Budget raised employer Class 1 NI from 13.8% to 15% and cut the Secondary Threshold from £9,100 to £5,000 in the same package. Those two moves together add roughly £900 of employer NI for each employee earning £40,000 or more compared with the previous regime. The Employment Allowance went up to £10,500 from £5,000 to offset the cost for small employers, but the measure was still the largest single business tax rise in recent memory and the political argument about it has not settled.
- How much employer NI do I pay on a £30,000 salary?
- The charge applies to earnings above the £5,000 Secondary Threshold, so a £30,000 salary leaves £25,000 within scope. At 15% that produces £3,750 for the year. Under the previous 13.8% rate with its £9,100 threshold the same employee cost £2,884.20, so the annual increase is £865.80. If your business qualifies for the Employment Allowance, the first £10,500 of your total employer NI across all staff is covered, which on a very small payroll can remove the charge altogether.
- Can a sole-director company claim the Employment Allowance?
- No. The allowance needs either at least one employee besides the director, or two directors who both earn above the Secondary Threshold, so a company with one director and no other staff is the main group shut out. You also have to be running a trade or business, which excludes public sector employers unless they qualify under a specific rule. Everyone else claims through PAYE on the Employer Payment Summary, and it is usually applied automatically once eligibility is recorded.
- How much does salary sacrifice save the employer?
- On £1,000 of sacrificed salary the business avoids 15% NI, which is £150, plus the 0.5% Apprenticeship Levy where it applies, another £5. That is £155 which would otherwise have gone to HMRC. Employers running best practice return the saving as an additional pension contribution, so a £1,000 sacrifice arrives in the scheme as £1,155 and costs the company nothing beyond the administration. It is worth asking HR whether your scheme includes that NI passback.