National Insurance is one of the main costs businesses need to consider when employing staff. Alongside wages, workplace pension contributions and other employment costs, employers are responsible for paying National Insurance contributions (NICs) on eligible employee earnings.
Following changes introduced in April 2025, the standard employer National Insurance rate increased to 15%, while the earnings threshold at which employers start paying was reduced.
These changes remain in place for the 2026/27 tax year, making it important for businesses to understand how much National Insurance they need to pay and how it affects their payroll costs.
In this guide, we explain the employer NI rates for 2026/27, how National Insurance contributions are calculated and what employers can do to manage their payroll responsibilities.
What Are the Employer NI Rates for 2026/27?
For the 2026/27 tax year, the standard employer National Insurance rate is 15% on employee earnings above the secondary threshold.
The secondary threshold is the amount an employee can earn before their employer becomes liable for National Insurance contributions.
The current thresholds are:
|
Employer NI threshold |
2026/27 |
|
Standard employer National Insurance rate |
15% |
|
Annual secondary threshold |
£5,000 |
|
Monthly secondary threshold |
£417 |
|
Weekly secondary threshold |
£96 |
|
Employment Allowance |
Up to £10,500 |
These figures apply to the standard employer Class 1 National Insurance rules. Different thresholds or reliefs may apply to certain categories of employees, including eligible apprentices, younger workers and veterans.
The standard employer NI rate and secondary threshold have remained unchanged from the 2025/26 tax year.
How Much National Insurance Do Employers Pay?
The amount of National Insurance an employer pays depends on their employees’ earnings and the applicable National Insurance category.
For most employees, employers pay 15% on earnings above the secondary threshold.
For example, consider an employee earning £30,000 per year.
Using the annual thresholds for illustration:
- Annual salary: £30,000
- Employer NI secondary threshold: £5,000
- Earnings above the threshold: £25,000
- Employer NI rate: 15%
- Annual employer NI contribution: £3,750
This means the employer would pay approximately £3,750 in National Insurance contributions for that employee over the year, in addition to their £30,000 salary.
The total annual employment cost would therefore be £33,750 before accounting for workplace pension contributions and other employment costs.
This is a simplified example based on annual figures. Actual contributions are generally calculated using the relevant earnings period, and Employment Allowance or other reliefs may reduce the amount payable.
What Changed to Employer National Insurance in April 2025?
The April 2025 changes introduced several adjustments to employer National Insurance contributions, which continue to affect businesses in 2026/27.
Employer NI Rate Increased to 15%
Before April 2025, the standard employer NI rate was 13.8%.
This increased to 15% from 6 April 2025, meaning employers became liable for a higher percentage of eligible employee earnings.
For businesses employing multiple members of staff, this increased their overall payroll costs.
Employer NI Secondary Threshold Reduced to £5,000
The annual secondary threshold was also reduced from £9,100 to £5,000.
This means employers now start paying National Insurance on a larger proportion of an employee’s earnings.
The lower threshold can have a particularly noticeable impact on businesses employing part-time workers or employees earning relatively modest salaries.
Employment Allowance Increased to £10,500
To help eligible businesses manage their National Insurance costs, the Employment Allowance increased from £5,000 to £10,500.
This allowance remains at £10,500 for the 2026/27 tax year.
Eligible employers can use it to reduce their annual employer Class 1 National Insurance liability, potentially offsetting some or all of the contributions they would otherwise need to pay.
What Is Employment Allowance and Who Can Claim It?
Employment Allowance is a government scheme that allows eligible employers to reduce their annual Class 1 National Insurance bill.
For the 2026/27 tax year, qualifying employers can claim up to £10,500.
The allowance is designed to help businesses and other eligible organisations reduce their employer National Insurance costs.
However, not every employer qualifies.
For example, a limited company cannot normally claim Employment Allowance if its only employee liable for employer Class 1 National Insurance is a single director.
Additional restrictions can apply to certain public sector organisations and connected companies.
Employers should check their eligibility before claiming the allowance through their payroll software.
How Do Employer NI Rates Affect Business Payroll Costs?
Employer National Insurance is an additional cost on top of employee salaries.
For businesses with larger workforces, even relatively small changes to National Insurance rates or earnings thresholds can have a significant effect on payroll expenditure.
The current employer NI rules can affect businesses in several ways.
Higher Overall Employment Costs
The combination of a higher employer NI rate and lower secondary threshold means many businesses pay more in National Insurance than they did before April 2025.
This can affect payroll budgets, particularly where businesses employ large numbers of staff.
Additional Financial Planning
When reviewing salary increases, recruitment plans or workforce costs, employers need to account for National Insurance alongside wages and workplace pension contributions.
Understanding the full cost of employment helps businesses make more informed financial decisions.
Greater Importance of Accurate Payroll Processing
Calculating employer National Insurance correctly is an essential part of payroll management.
Different rates, employee categories, earnings thresholds and reliefs can affect the amount owed to HMRC.
Using accurate payroll systems and maintaining up-to-date employee records helps businesses meet their reporting requirements and reduce the risk of errors.
How Can Employers Manage National Insurance Costs?
Although employers must pay the National Insurance contributions they legally owe, there are steps businesses can take to manage their payroll costs more effectively.
These include:
- Reviewing Employment Allowance eligibility: Checking whether your business can claim up to £10,500 towards its employer NI bill.
- Accurate payroll budgeting: Accounting for National Insurance, pension contributions and other employment costs when planning salaries.
- Checking employee NI categories: Ensuring the correct category letters and eligible reliefs are applied.
- Reviewing payroll processes: Making sure National Insurance calculations and HMRC submissions are accurate.
- Seeking specialist payroll support: Working with experienced payroll professionals to manage deductions, reporting and compliance.
Keeping your payroll processes up to date can help avoid unnecessary mistakes and ensure your business meets its obligations.
For more information about managing these responsibilities, explore our payroll compliance services.
How Elite Payroll Services Can Help With Employer National Insurance
Understanding employer NI rates and managing contributions is an important part of running payroll accurately.
At Elite Payroll Services, we have over 25 years of experience supporting businesses across the UK with their payroll responsibilities.
Our dedicated payroll specialists can assist with:
- Employer and employee National Insurance calculations
- PAYE processing and HMRC submissions
- Payroll reporting and record keeping
- Employment Allowance administration
- Statutory payments and workplace pension deductions
- Ongoing payroll compliance support
Whether you manage payroll in-house or are considering outsourcing it, our team can help make the process more straightforward.
Find out more about our outsourced payroll services and how we can support your business.