Employer NI Rise Impact Calculator Trending

Two changes to employer National Insurance landed together in April 2025. The rate rose from 13.8% to 15%, and the Secondary Threshold, the point at which employers start paying, fell from £9,100 to £5,000 a year. Because the threshold cut costs the same on every employee while the rate rise scales with pay, the combined effect falls hardest on lower-paid staff. The Treasury expects to raise £25 billion a year from it, the largest UK employer tax rise in 30 years.

The calculator models the impact both per employee and across the whole payroll. Enter the number of employees and their average salary and it shows the employer NI now due, what the same wage bill would have cost at 13.8% above the old £9,100 threshold, and the gap between the two. It then nets off the Employment Allowance, counting only the rise from £5,000 to £10,500 for a firm that could already claim, which covers the whole increase only for the smallest payrolls.

The per-employee arithmetic is straightforward. On a £35,000 salary the old charge was £25,900 at 13.8%, or £3,574, while the new one is £30,000 at 15%, or £4,500, an increase of £926. At £25,000 the bill goes from £2,194 to £3,000, a rise of £806. At £55,000 it moves from £6,334 to £7,500, up £1,166, and at £150k from £19,444 to £21,750, up £2,306. Typical small and medium employers are seeing between £900 and £3,000 more per employee each year, with the £25-£35k earnings band hit hardest in proportion.

The Employment Allowance takes some of the sting out. It rose to £10,500 from April 2025, having been £5,000, and it comes straight off your total employer NI bill. Eligibility widened at the same time, because the old £100,000 cap on the previous year's NI bill was abolished from 6 April 2025, so employers of any size can now claim. For a firm that already claimed the old £5,000, only the extra £5,500 offsets the rise. Limited companies with a single director and no other employees remain excluded, only one company in a connected group can claim, and most public sector employers cannot claim at all.

Where the change bites depends on the shape of the payroll. Hospitality carries a high proportion of staff in the £20-£35k range, so a typical pub or restaurant is finding £8,000 to £25,000 a year more, and retail sits on a similar profile with the cost eating into margins. Social care combines low margins with high headcount, and some providers have warned about closures. A logistics or warehouse operator can be £15,000 to £40,000 a year worse off. Construction is affected less, and technology and professional services least of all per head, since most of those employees earn over £50k, though the total still adds up at scale.

Employers have responded in fairly predictable ways over 2025 and 2026, with pay freezes rather than real-terms rises, smaller pension contributions and bonuses, recruitment pauses, redundancies where margins are thin, price increases passed on to customers, and more investment in automation to reduce headcount. The Treasury's argument is that firms with healthy margins can absorb the cost. Plenty of smaller businesses say they cannot, and some are looking harder at engaging people on a self-employed basis, which brings IR35 into the picture and its own set of risks.