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 some employers can't claim it. The most common one: if your company has only one director, they mustn't be the only employee you pay employer NI on. 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. An overseas employer with no residence, presence or place of business in the UK usually isn't liable for employer's NI. Its employee normally sets up a DPNI (direct payment) scheme and pays their own income tax and employee (primary) NI to HMRC through it, with no employer's NI on top. That changes for employers in the EU, the EEA and Switzerland: they're usually liable for both employee and employer NI, and the employer sets up an NI-only scheme to pay it, with the employee's income tax paid through Self Assessment or a separate tax-only scheme. A UK host or end client that the employee provides services to can be treated as the employer for NI, so the answer turns on your specific facts. We will ask HMRC for the scheme that fits your facts, and they may suggest a different one once they have the full facts.

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