Employer National Insurance explained (2026/27)

Employer National Insurance is the contribution a business pays on top of an employee's wages, separate from the NI deducted from the employee's own pay. It's one of the biggest "hidden" costs of employing in the UK. Here's how it works in 2026/27.

What it is

Formally it's Secondary Class 1 National Insurance Contributions. When you run payroll, you deduct the employee's own (primary) NI and Income Tax from their pay, and on top, the business owes its own (secondary) NI to HMRC. The employee never sees the employer's contribution; it's a cost you carry.

The 2026/27 numbers

In plain terms: you pay 15% on everything an employee earns above £5,000 a year. There's no upper limit, unlike the employee's own NI, the employer rate doesn't taper off at higher pay.

How to work out what you'll pay

The basic calculation is simple:

Some quick examples for 2026/27:

(These ignore the precise way NI is worked out per pay period, but they're close enough for budgeting.)

The Employment Allowance can wipe it out

Eligible employers can claim the Employment Allowance, for 2026/27, up to £10,500 knocked off your employer NI bill for the year. From April 2025 the old £100,000 NI-bill cap was removed, so far more employers qualify. For a small team, this can reduce your employer NI to zero. It isn't automatic, you have to claim it through your payroll, and a few categories of employer are excluded, so it's worth checking eligibility.

Apprentices under 25 pay no employer NI

There's a second, often-missed saving: an apprentice under 25 on an approved apprenticeship goes onto NI category H, where you pay 0% employer NI on earnings up to £50,270 a year. For most apprentices that means no employer NI at all. See employing a UK apprentice: pay, NI & cost for how it works and what it's worth.

A note for overseas employers

If you're an overseas company employing in the UK, it depends on how you're set up. Employ through a UK entity and employer's (secondary) NI applies in the normal way. Under a DPNI scheme, where the overseas employer has no UK place of business, it's often only the employee's own (primary) NI that's collected through the scheme, a foreign employer with no UK presence generally falls outside the employer's secondary NI charge. A UK host or end-client, or certain other arrangements, can bring secondary NI back into play, so the answer turns on your specific facts. We confirm exactly which contributions apply, and any allowance you can claim, before anything starts.

General information, not tax advice. Figures reflect 2026/27 UK rates as at July 2026. Please confirm your specific position before relying on these numbers.