Employer NI Calculator

Employer National Insurance contributions are a payroll tax that every UK employer must pay on top of their employees' salaries. Unlike employee NI, which is deducted from the worker's pay, employer NI is an additional cost borne entirely by the business. For 2026-27, the employer NI rate is 15% on all earnings above the secondary threshold of GBP 5,000 per year. The secondary threshold was reduced from GBP 9,100 to GBP 5,000 in April 2025, and the rate increased from 13.8% to 15%. These changes significantly increased the cost of employment for UK businesses. For a single employee earning GBP 30,000, employer NI costs GBP 3,750 per year -- a substantial addition to the headline salary cost. To offset some of this burden, eligible employers can claim Employment Allowance, which reduces the total employer NI bill by up to GBP 10,500 per year (increased from GBP 5,000 in 2025). This is particularly valuable for small businesses. A company with a single employee earning GBP 30,000 would pay GBP 3,750 in employer NI before Employment Allowance, meaning the allowance completely eliminates their NI bill with GBP 6,750 to spare for future hires. Not all employers qualify for Employment Allowance. You are not eligible if your employer NI bill in the previous tax year exceeded GBP 100,000, if you are a public body or local authority, if you employ someone for personal domestic work (such as a nanny), or if you are a single-director company with no other employees. Understanding employer NI is essential for accurate payroll budgeting, pricing decisions, and business planning. The true cost of an employee is their salary plus employer NI, pension contributions, and any other benefits. This calculator helps you estimate the NI component and see the impact of Employment Allowance on your total bill.

How to Use This Calculator

To calculate your employer National Insurance: 1. Enter the annual salary for one employee. This is the gross salary before any deductions. If you pay different salaries, calculate each role separately or use the average. 2. Enter the number of employees on this salary level. The calculator multiplies the per-employee NI by this number to give you the total bill. 3. Toggle whether you are eligible for Employment Allowance. If eligible, the calculator deducts up to GBP 10,500 from your total employer NI bill. The allowance applies to the total bill across all employees, not per employee. 4. Review the results. The calculator shows NI per employee, total NI, Employment Allowance saving, and the net NI payable. The total cost per employee figure adds the net NI share to the salary, showing the true employment cost.

How It Works

Employer NI for 2026-27 is calculated as a flat percentage on earnings above the secondary threshold. The formula is straightforward: - Employer NI per employee = (Annual salary - GBP 5,000) x 15% - If salary is GBP 5,000 or less, NI is GBP 0 - Total NI = NI per employee x number of employees - If eligible for Employment Allowance: Net NI = Total NI - GBP 10,500 (minimum GBP 0) Unlike employee NI, which has multiple bands, employer NI uses a single flat rate above the threshold. There is no upper earnings limit for employer NI -- the 15% rate applies to all earnings above GBP 5,000 with no cap. The Employment Allowance is deducted from the total employer NI bill for the year. It is applied monthly through your payroll software until the full GBP 10,500 has been used. If your total NI bill is less than GBP 10,500, you simply pay nothing.

Worked Examples

Employer NI is one of the largest hidden costs of employment in the UK. When budgeting for a new hire, always add at least 15% of the salary above GBP 5,000 to account for employer NI. For a GBP 50,000 employee, that is an additional GBP 6,750 per year. The Employment Allowance was increased to GBP 10,500 from April 2025 to partially compensate for the NI rate increase. To claim it, you need to indicate your eligibility through your payroll software at the start of the tax year. HMRC will verify your eligibility. The allowance cannot be carried forward -- if you do not use the full GBP 10,500 in one year, the remainder is lost. Employer NI also applies to benefits in kind, such as company cars, private medical insurance, and other taxable perks. The NI is calculated on the cash equivalent of the benefit. This is reported through P11D forms or payrolled benefits. For directors, employer NI is calculated on an annual basis rather than per pay period. This can lead to different in-year cashflow compared to regular employees. If you are planning salary sacrifice arrangements (for pensions, cycle to work schemes, or electric vehicles), the reduced salary also reduces the employer NI liability, creating savings for both the employer and employee.