Employer National Insurance 2026/27: Rates, Thresholds and Worked Examples

Employer National Insurance for 2026/27 is 15% of each employee’s earnings above the secondary threshold of £5,000 a year (£417 a month, £96 a week). There is no upper cap. Eligible employers can reduce the bill by up to £10,500 a year through the Employment Allowance, and employers pay 0% on most pay for under-21s and apprentices under 25.

This guide covers the 2026/27 tax year (6 April 2026 to 5 April 2027). Every figure below comes from HMRC’s rates and thresholds for employers 2026 to 2027.

What are the employer National Insurance rates and thresholds for 2026/27?

Employer contributions are “secondary Class 1” National Insurance. You pay them on top of salary, not out of it. Your employee pays their own primary Class 1 contributions, which you deduct through payroll.

Threshold	Weekly	Monthly	Annual
Lower earnings limit (LEL)	£129	£559	£6,708
Secondary threshold (employer NI starts)	£96	£417	£5,000
Primary threshold (employee NI starts)	£242	£1,048	£12,570
Upper earnings limit (UEL)	£967	£4,189	£50,270

For category letter A, which covers most employees:

• Employer: 15% on all earnings above the secondary threshold. There is no upper limit.
• Employee: 8% between the primary threshold and the upper earnings limit, then 2% above it.

The secondary threshold sits well below the primary threshold. That means you start paying employer NI on someone’s pay before they start paying any themselves.

How is employer National Insurance calculated each pay period?

National Insurance is not worked out on annual salary. Payroll looks at what you pay in each pay period and compares it with the threshold for that period’s length. For a monthly payroll, that is £417.

The steps for a monthly-paid employee on category A:

1. Take gross pay for the month that counts for National Insurance.
2. Subtract the monthly secondary threshold of £417.
3. Multiply what is left by 15%.

If someone earns £2,500 in a month, the calculation is (£2,500 − £417) × 15% = £2,083 × 15% = £312.45.

Because each period stands alone, timing matters. An employee who gets a £6,000 bonus in March is assessed on that month’s pay, not their average. For employer NI at 15% with no ceiling, the effect is small. For the employee’s 8% and 2% bands it can make a real difference.

Payroll software using HMRC’s tables can differ from the exact percentage method by a few pence. The examples below use the exact method.

What does employer NI cost on a £30,000 and a £60,000 salary?

Both examples assume category letter A, a monthly payroll, and no salary sacrifice or taxable benefits.

Worked example: £30,000 a year

Monthly pay is £30,000 ÷ 12 = £2,500.

	Monthly	Annual
Pay above secondary threshold	£2,500 − £417 = £2,083	£30,000 − £5,000 = £25,000
Employer NI at 15%	£312.45	£3,750.00
Employee NI at 8% (above £1,048 a month)	£116.16	£1,394.40

Over twelve months the monthly figures add up to £3,749.40 of employer NI. That is 60p less than the annual calculation, because twelve monthly thresholds of £417 (£5,004) come to slightly more than £5,000.

Worked example: £60,000 a year

Monthly pay is £60,000 ÷ 12 = £5,000.

	Monthly	Annual
Pay above secondary threshold	£5,000 − £417 = £4,583	£60,000 − £5,000 = £55,000
Employer NI at 15%	£687.45	£8,250.00
Employee NI at 8% (£1,048 to £4,189)	£251.28	£3,016.00
Employee NI at 2% (above £4,189)	£16.22	£194.60

Employer NI keeps rising at 15% above the upper earnings limit. Only the employee’s rate drops to 2%. Doubling the salary from £30,000 to £60,000 takes the employer cost from £3,750 to £8,250, more than double, because the first £5,000 is the only part that’s free.

National Insurance isn’t the only on-cost. Most employees also need a workplace pension, with an employer contribution of at least 3% of qualifying earnings (see our auto-enrolment guide). To see salary, NI and pension together, try our employer cost calculator.

What is the Employment Allowance and who can claim it?

The Employment Allowance lets eligible employers reduce their annual employer National Insurance bill by up to £10,500 in 2026/27. HMRC applies it against your employer Class 1 contributions each pay run until the £10,500 is used up or the tax year ends, whichever comes first.

Say you employ four people on £30,000 each. Your annual employer NI is 4 × £3,750 = £15,000. After the allowance, you would pay £15,000 − £10,500 = £4,500. In practice you pay nothing for the first few months, then the full amount once the allowance runs out.

Who is eligible?

GOV.UK sets out the eligibility rules. The main points:

• Businesses and charities can usually claim, including employers of care or support workers. GOV.UK says you can claim if you do less than half your work in the public sector.
• Larger employers can now claim. From April 2025, employers with more than £100,000 of Class 1 National Insurance liabilities can apply. That limit used to rule them out.
• Single-director companies can’t claim if the director is the only employee liable for secondary Class 1 National Insurance. Once you employ one other person paid above the secondary threshold, that rule stops blocking you.
• Connected companies: if your company is part of a group, only one company in the group can claim.
• One payroll only: if you run more than one PAYE scheme, you can claim against only one of them.

Some employees don’t count. You can’t claim for workers caught by the IR35 off-payroll working rules, or for household staff such as nannies or gardeners, unless they’re carers or support workers.

How do you claim it?

You claim through your payroll software by putting “Yes” in the Employment Allowance indicator on your next Employer Payment Summary (EPS). If you stop being eligible, send an EPS with the indicator set to “No”. GOV.UK warns not to do this just because you’ve used up the £10,500. Our RTI submissions guide explains how the EPS fits into the monthly payroll cycle.

Which category letters reduce employer National Insurance?

Each employee has a category letter on their payroll record, and it decides which rates apply. GOV.UK lists them on its category letters page. Most staff are on A. The letters employers most often need to get right are below.

Letter	Who it is for	Employer rate in 2026/27
A	Most employees	15% above £5,000 a year
M	Employees under 21	0% up to £50,270, then 15%
H	Apprentices under 25	0% up to £50,270, then 15%
V	Veterans in their first civilian job since leaving the armed forces	0% up to £50,270, then 15%
C	Employees over State Pension age	15% (the employee pays nothing)
J	Employees who defer because they pay NI in another job	15%

Under-21s and apprentices under 25

For category M (under 21) and category H (apprentices under 25), the upper secondary threshold for 2026/27 is £967 a week, £4,189 a month or £50,270 a year, the same as the upper earnings limit. You pay 0% below that and 15% above it. The employee still pays their normal contributions.

So hiring a 19-year-old on £25,000 costs nothing in employer NI. On category A the same salary would cost (£25,000 − £5,000) × 15% = £3,000.

For category H, the apprentice must be under 25 and working towards an approved UK government apprenticeship standard or framework. Change the letter when the employee turns 21, when an apprentice turns 25, or when the apprenticeship ends, and use the letter that applies from that point.

There are also letters for staff working in Freeport or Investment Zone special tax sites (F, I, L, S, N, E, D, K). If that applies to you, check the full rates table before you set up payroll.

What should employers check this tax year?

• Thresholds in your software. Make sure the £417 monthly secondary threshold is loaded, not last year’s figure.
• Category letters. Check dates of birth so that letters M and H change on time. Check apprenticeship records too.
• Employment Allowance. Confirm you have claimed it on an EPS and that only one company in your group is claiming.
• Budgets. Cost new roles at salary plus 15% of pay above £5,000, plus pension. Don’t use the employee’s thresholds.
• Benefits in kind. Benefits carry Class 1A National Insurance at 15% too, reported on form P11D(b) after the tax year ends.

Getting employer NI right every pay run

Employer National Insurance is simple in principle. Mistakes usually come from small details: an out-of-date threshold, a missed category letter change or an unclaimed allowance. If you’d rather not track these yourself, our payroll services team runs UK payroll, sends the RTI submissions and checks category letters and the Employment Allowance claim every pay period.