Employer NI Calculator
Work out employer National Insurance and the true cost of an employee for 2026/27, including the Employment Allowance and workplace pension.
- 15%employer NI
- £5,000threshold a year
- £10,500Employment Allowance
- Salary
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- Employer NI
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- Employment Allowance
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- Employer NI to pay
- –
- Employer pension
- –
- Per month
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- Per week
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- Cost on top of salary
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- Cost per employee
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HMRC employer rates · Rates checked 3 November 2026 · Not affiliated with HMRC · How we calculate
Employer NI and pension at every salary
What you pay on top of salary for one employee of this type, with your salary marked.
- NI and pension on top of salary
- Your salary
By employee type
Employer NI and total cost on a salary of £30,000, before the Employment Allowance.
| Employee type | Employer NI | Total cost |
|---|
This employer NI calculator (sometimes called an employer NIC calculator) works out the employer National Insurance contributions on any salary, takes off the Employment Allowance if you can claim it, and adds the workplace pension you pay. The result is the true cost of an employee: what you actually spend each year, month and week. It works as an employee cost calculator in both directions. Enter a salary to see the cost to the employer, or enter a budget to see the highest salary you can afford.
How employer National Insurance contributions work in 2026/27
Employers pay Class 1 secondary National Insurance at 15% on each employee's earnings above the secondary threshold of £5,000 a year. It's paid on top of the salary, so it never comes out of the employee's pay. The employee pays their own National Insurance separately, at 8% above £12,570.
On a £30,000 salary, employer NI is (£30,000 − £5,000) × 15% = £3,750 a year. Payroll works it out each pay day using the weekly or monthly threshold, which gives the same total over a full year.
Some employees cost less. For under-21s, apprentices under 25 and veterans in their first year of civilian work, the rate is 0% up to £50,270. Choose the employee type in the calculator to apply it.
Employer NI rates and thresholds 2026/27
| Threshold | Week | Month | Year |
|---|---|---|---|
| Secondary threshold (15% above this) | £96 | £417 | £5,000 |
| Under 21, apprentice under 25, veteran (0% up to) | £967 | £4,189 | £50,270 |
| Freeport and Investment Zone (0% up to) | £481 | £2,083 | £25,000 |
Employer rate 15% on earnings above the threshold, with no upper limit. Employment Allowance up to £10,500 a year. Class 1A NI on benefits in kind is also 15%.
Employer NI and total cost at common salaries (2026/27)
The cost of one standard employee with the minimum 3% pension on qualifying earnings, before the Employment Allowance.
| Salary | Employer NI | Employer pension | Total cost a year | Per month | On top of salary |
|---|---|---|---|---|---|
| £12,570 | £1,135.50 | £189.90 | £13,895.40 | £1,157.95 | 10.54% |
| £20,000 | £2,250 | £412.80 | £22,662.80 | £1,888.57 | 13.31% |
| £25,000 | £3,000 | £562.80 | £28,562.80 | £2,380.23 | 14.25% |
| £30,000 | £3,750 | £712.80 | £34,462.80 | £2,871.90 | 14.88% |
| £35,000 | £4,500 | £862.80 | £40,362.80 | £3,363.57 | 15.32% |
| £40,000 | £5,250 | £1,012.80 | £46,262.80 | £3,855.23 | 15.66% |
| £50,000 | £6,750 | £1,312.80 | £58,062.80 | £4,838.57 | 16.13% |
| £60,000 | £8,250 | £1,320.90 | £69,570.90 | £5,797.58 | 15.95% |
| £80,000 | £11,250 | £1,320.90 | £92,570.90 | £7,714.24 | 15.71% |
| £100,000 | £14,250 | £1,320.90 | £115,570.90 | £9,630.91 | 15.57% |
Standard employee (category A). The pension is 3% of pay between £6,240 and £50,270. Staff earning under £10,000 don't have to be enrolled, so the pension may not apply to the lowest salary.
The true cost of employing someone
Salary is only the start. Every employee costs at least three things, and this cost to employer calculator includes all three. On a £30,000 salary they add up to £34,462.80 a year, 14.88% more than the salary.
- 1
Salary
The gross pay you agree, including bonuses, commission and overtime. Employer NI is charged on all of it.
- 2
Employer National Insurance
15% above £5,000 a year, less the Employment Allowance if you can claim it. On £30,000 that's £3,750.
- 3
Workplace pension
At least 3% of qualifying earnings for staff you automatically enrol. On £30,000 that's £712.80. There's no NI on it.
The calculator leaves out costs that vary from business to business: recruitment fees, equipment and software, training, office space, employer's liability insurance and cover for holidays and sickness. Businesses with a pay bill over £3 million also pay the 0.5% Apprenticeship Levy. Benefits such as a company car or health insurance attract 15% Class 1A National Insurance on their value.
Employer cost worked examples
Five employers, each worked out by the calculator above for 2026/27.
One employee · £30,000
A standard hire
Employer NI of £3,750 and a 3% pension of £712.80 bring the cost to £34,462.80 a year, or £2,871.90 a month. Without the Employment Allowance, this is what you budget for.
Under 21 · £24,000
No employer NI for a young worker
Because the employee is under 21, there's no employer NI on pay up to £50,270. The cost is £24,532.80, which is £2,850 less than for an employee aged 21 or over on the same pay.
Four employees · £28,000 each
With the Employment Allowance
Employer NI on four salaries is £13,800. The Employment Allowance takes off £10,500, leaving £3,300 to pay. The team costs £117,911.20 a year, £10,500 less than without the allowance.
Freeport · £32,000
A new hire at a Freeport site
Employer NI is only charged above £25,000, so it's £1,050 instead of £4,050. With the pension, the cost is £33,822.80 a year.
Budget · £40,000
What salary can I afford?
With £40,000 to spend in total, the highest salary you can offer is £34,692.54. The rest pays £4,453.88 of employer NI and £853.58 of pension. Switch the calculator to "Salary for a budget" to try your own figure.
Employment Allowance: who can claim
The Employment Allowance cuts your employer National Insurance bill by up to £10,500 a year. Since April 2025 there's no upper limit on the size of the employer, so most businesses and charities with staff can claim it. You claim it through your payroll software, and it's used up against your employer NI until the £10,500 runs out.
You can't claim it if:
- You're a company whose only employee paid above £5,000 is a director
- You're a public body, or do more than half your work in the public sector (charities excepted)
- You employ someone for personal or household work, such as a nanny, unless they're a care or support worker
Connected companies share one allowance between them.
Reliefs for younger staff, apprentices and veterans
Some employees have a higher threshold, so you pay no employer NI on most or all of their pay. Payroll applies these through the National Insurance category letter.
| Employee | Letter | 0% up to |
|---|---|---|
| Under 21 | M | £50,270 |
| Apprentice under 25 | H | £50,270 |
| Veteran, first 12 months of civilian work | V | £50,270 |
| New Freeport or Investment Zone employee | F, N | £25,000 |
Above these limits the normal 15% applies. Freeport and Investment Zone relief lasts up to 36 months for each eligible employee.
Directors and other special cases
- Directors. NI is worked out on an annual earnings period, not pay period by pay period. The company still pays 15% above £5,000, even for a sole director.
- Over State Pension age (letter C). The employee stops paying NI, but you still pay employer NI as normal.
- Married women's reduced rate (B) or deferment (J, Z). These change what the employee pays. Employer NI stays the same, apart from the under-21 threshold for letter Z.
Paying and reporting employer NI
Employer NI goes through payroll with PAYE. Each pay day you send HMRC a Full Payment Submission showing what each employee earned and the National Insurance due. You then pay HMRC the PAYE, employee NI and employer NI together.
- Monthly payments. Due by the 22nd of the following tax month if you pay electronically, or the 19th if you pay by post.
- Quarterly payments. Allowed if you expect to pay HMRC less than £1,500 a month on average.
- Employment Allowance. Claimed on an Employer Payment Summary in your payroll software. It then reduces each payment until it's used up.
- Class 1A on benefits. Reported on form P11D(b) by 6 July after the tax year ends, and paid by 22 July.
- Class 1B on a PAYE Settlement Agreement. Paid by 22 October after the tax year ends.
HMRC charges interest on late payments and can charge penalties if payments are late more than once in a tax year.
Employer NI on bonuses, benefits and expenses
Bonuses, overtime and commission are earnings, so they carry 15% employer NI in the pay period you pay them. If the employee's regular pay is already above the £417 monthly threshold, employer NI on a bonus is simply 15% of it, whenever you pay it.
Benefits in kind, such as a company car, private medical insurance or a gym membership, carry Class 1A NI at 15% of the taxable value. You report them on a P11D, or through payroll if you payroll benefits.
Business expenses you reimburse, such as travel to a client or approved mileage payments, have no NI as long as they're genuine costs of the job. Some benefits are exempt too: employer pension contributions, cycle-to-work schemes and trivial benefits up to £50.
How employer NI has changed
Employer National Insurance went up sharply in April 2025. The Budget on 28 October 2026 kept the same rate and threshold for 2027/28.
| Tax year | Rate | Threshold | Employment Allowance | NI on £30,000 |
|---|---|---|---|---|
| 2024/25 | 13.8% | £9,100 | £5,000 | £2,884.20 |
| 2025/26 | 15% | £5,000 | £10,500 | £3,750 |
| 2026/27 | 15% | £5,000 | £10,500 | £3,750 |
| 2027/28 | 15% | £5,000 | £10,500 | £3,750 |
The Budget didn't announce any change to the Employment Allowance for 2027/28. On a £30,000 salary employer NI rose by £865.80 a year. The bigger Employment Allowance offsets this for many small employers.
Ways to reduce your employer NI bill
Claim the Employment Allowance
Worth up to £10,500 a year. It isn't automatic: switch it on in your payroll software at the start of each tax year.
Use salary sacrifice for pensions
When an employee swaps salary for an employer pension contribution, neither of you pays NI on the amount sacrificed. If a £30,000 employee sacrifices £1,500, you save £225 of employer NI. From April 2029 only the first £2,000 a year sacrificed will be free of NI, under changes the government has confirmed.
Use the right category letter
Under-21s, apprentices under 25 and veterans have no employer NI up to £50,270. Payroll only applies it if the letter is set correctly.
Pay directors through dividends
In a limited company, a director's salary above £5,000 costs employer NI, but dividends don't. Our salary vs dividend calculator finds the best mix.
Offer tax-free benefits
Some benefits have no NI at all, such as employer pension contributions, a cycle-to-work scheme or trivial benefits up to £50. Most benefits in kind still carry Class 1A NI.
Budget before you hire
Use the budget mode above to set a salary that fits. Remember the Employment Allowance is shared across all your staff, not given per employee.
Common employer NI mistakes
Budgeting with old rates
Plans made before April 2025 used 13.8% above £9,100. At 15% above £5,000, a £30,000 employee costs £865.80 a year more.
Taking employer NI from wages
Employer NI is your cost. It must not be deducted from the employee's pay, unlike their own employee NI.
Claiming the allowance as a sole director
If you're the only employee paid above £5,000 and you're a director, the company can't claim the Employment Allowance.
Forgetting the pension
Automatic enrolment adds at least 3% of qualifying earnings for most staff. It's easy to leave out of a hiring budget.
Wrong category letter
Leaving an under-21 or apprentice on letter A means paying employer NI you don't owe. You can correct it, but it's easier to set it right at the start.
Counting the allowance per employee
The £10,500 is per employer, or per group of connected companies, not per person. Enter all your staff to see how far it goes.
Notes and assumptions
- Annual basis. Employer NI is worked out on the yearly salary. Payroll works pay period by pay period, so monthly figures can differ by a few pence.
- Same salary for each employee. For staff on different pay, work each salary out separately and add up the Employment Allowance yourself.
- Allowance used here only. The Employment Allowance is applied to these employees. If you have other staff, some of it may already be used.
- Pension. Employer contributions only, on qualifying earnings or the whole salary. Salary sacrifice isn't modelled.
- Not included. Apprenticeship Levy, Class 1A NI on benefits, statutory payments, holiday cover, recruitment and other overheads.
When to speak to an accountant
- You're hiring your first employee and setting up payroll
- You're not sure whether you can claim the Employment Allowance, or you have connected companies
- You want to set up salary sacrifice or other benefits
- You have staff at a Freeport or Investment Zone site
- You're a director deciding between salary, dividends and pension
This page explains the rules and gives an estimate. It isn't tax or payroll advice for your situation.
Frequently asked questions
Quick answers about employer National Insurance and the cost of staff.
What is the employer National Insurance rate for 2026/27?
15% on each employee's earnings above the secondary threshold of £5,000 a year (£417 a month or £96 a week). The rate and threshold have been the same since 6 April 2025, and the Budget on 28 October 2026 kept them for 2027/28.
What is employer NIC?
Employer NIC stands for employer National Insurance contributions, also called Class 1 secondary contributions. It's the 15% National Insurance an employer pays on top of an employee's pay above £5,000 a year. It's a cost to the business and is never deducted from the employee's wages.
How do I calculate employer NI contributions?
Take the employee's annual salary, subtract £5,000, and multiply what's left by 15%. On a £30,000 salary that's (£30,000 − £5,000) × 15% = £3,750. Payroll software does the same each pay period using the weekly or monthly threshold.
How much does it cost to employ someone on £30,000?
About £34,462.80 a year: the £30,000 salary, £3,750 employer National Insurance and £712.80 minimum workplace pension. That's £2,871.90 a month, before recruitment, equipment or holiday cover.
How much is employer NI on a £50,000 salary?
£6,750 a year: (£50,000 − £5,000) × 15%. With the minimum 3% pension on qualifying earnings (£1,312.80), the total cost of a £50,000 employee is £58,062.80 a year.
What is the Employment Allowance?
It lets eligible employers reduce their employer National Insurance bill by up to £10,500 a year. Most businesses and charities with employees can claim it through their payroll software. It isn't paid as cash; it just stops you paying employer NI until the £10,500 is used up.
Who can't claim the Employment Allowance?
A company where the only employee paid above £5,000 is a director, public bodies, and businesses doing more than half their work in the public sector (charities excepted). Personal and household employers, such as people employing a nanny, can't claim it either, except for care or support workers.
Do employers pay National Insurance for under-21s?
Not on earnings up to £50,270 a year. Under-21s use category letter M, and employers pay 0% up to the upper secondary threshold and 15% above it. The same applies to apprentices under 25 (letter H) and veterans in their first year of civilian work (letter V).
Do I pay employer NI on pension contributions?
No, not on ordinary employer pension contributions. That is why salary sacrifice, where the employee swaps salary for employer pension contributions, saves employer NI. The calculator works out the pension cost separately and doesn't charge NI on it.
What is the minimum employer pension contribution?
Under automatic enrolment it's 3% of qualifying earnings, the part of pay between £6,240 and £50,270. The total contribution must be at least 8%, so the employee pays the rest. You must enrol staff aged 22 to State Pension age earning over £10,000.
Do I pay employer NI on employees over State Pension age?
Yes. Employees over State Pension age stop paying their own National Insurance, but the employer still pays 15% above the secondary threshold. Use the standard option in the calculator.
How do Freeport and Investment Zone reliefs work?
Eligible new employees who spend most of their working time in a Freeport or Investment Zone tax site have no employer NI on earnings up to £25,000 a year, for up to 36 months. Above that, the usual 15% applies. The employer must meet the conditions for the site.
Does a director pay employer NI on their own salary?
The company does, at the same 15% above £5,000. Directors are worked out on an annual earnings period, so the calculator's annual figures match. For a sole director the usual best salary is £12,570; our salary vs dividend calculator compares the options.
What is the Apprenticeship Levy?
A 0.5% charge on employers whose total annual pay bill is over £3 million, with a £15,000 allowance that cancels it out below that. Small businesses don't pay it, so the calculator leaves it out.
Is this the same as HMRC's calculator?
It uses the same HMRC rates and thresholds and the annual method. HMRC's payroll tools work pay period by pay period, so monthly figures can differ by a few pence because of rounding. This calculator is independent and not affiliated with HMRC.
Related calculators
Other free calculators for limited companies and employers:
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Last updated 3 November 2026 · Rates checked against gov.uk on 3 November 2026 · LinkedIn (opens in new tab)
- Rates and thresholds for employers 2026 to 2027 – gov.uk (opens in new tab)
- Claim Employment Allowance – gov.uk (opens in new tab)
- Automatic enrolment earnings thresholds – The Pensions Regulator (opens in new tab)
- Changes to salary sacrifice for pensions from April 2029 – gov.uk (opens in new tab)
- National Insurance rates and category letters – gov.uk (opens in new tab)
This calculator gives estimates for guidance only and is not tax advice. Business Tax Calc is independent and not affiliated with HMRC. See our methodology for how calculations are made and tested.