The 2026/27 tax year continues the changes to employer National Insurance introduced in April 2025. The employer NI rate remains at 15%, and the Secondary Threshold — the point at which NI becomes payable — stays at £5,000 per year.
Employers are therefore paying more NI on a larger portion of each employee's earnings than before April 2025. For many businesses this is a substantial increase in employment costs that needs to be factored into budgets and hiring plans.
2026/27 Employer NI Rates at a Glance
Parameter
2024/25 (Old)
2026/27 (Current)
Change
Employer NI rate
13.8%
15%
+1.2 percentage points
Secondary Threshold (annual)
£9,100
£5,000
-£4,100
Secondary Threshold (monthly)
£758
£417
-£341
Employment Allowance
£5,000
£10,500
+£5,500
EA eligibility cap
£100,000 NI bill
No cap
Removed
Upper Secondary Threshold
£50,270
£50,270
No change
Employer NI is calculated on each employee's earnings above the Secondary Threshold. The formula is straightforward:
The category letter on an employee's payroll record determines which employer NI threshold applies. The most common are:
Category
Applies to
Employer NI
A
Most employees aged 21 and over
15% above £5,000
M
Employees under 21
15% above £50,270 only
H
Apprentices under 25
15% above £50,270 only
C
Employees over State Pension age
15% above £5,000 (the employee pays no NI)
V
Qualifying armed forces veterans, first 12 months of civilian employment
15% above £50,270 only
Other letters exist, including reduced-rate and freeport/investment-zone categories. Check the current HMRC category letter list if an employee does not fit the rows above.
Employers pay significantly less NI when hiring younger workers. For employees under 21, and apprentices under 25, the threshold before employer NI is due rises to the Upper Secondary Threshold of £50,270 per year.
No employer NI is payable on earnings below £50,270 for these groups — only earnings above it are charged at 15%. For most roles that means zero employer NI.
Employee Category
NI-Free Threshold
Employer NI on £30,000
Standard (21+)
£5,000
£3,750
Under 21
£50,270
£0
Apprentice under 25
£50,270
£0
Employers also pay Class 1A NI at 15% on the taxable value of most benefits in kind — company cars, private medical insurance and so on. It is reported on the P11D and paid annually, by 19 July (22 July if paying electronically). The employee pays income tax on the benefit but no NI on it.
Eligible employers can offset up to £10,500 of their employer NI liability in 2026/27. The £100,000 NI-bill cap that previously restricted eligibility has been removed, so most businesses with employees can claim regardless of payroll size. Companies whose only employee is also a director cannot claim.
For the full eligibility rules, exclusions and how to claim it through your payroll software, see our Employment Allowance 2026/27 guide.
Small Businesses (1-10 Employees)
Small employers are largely shielded by the increased Employment Allowance. A business with 5 employees earning £25,000 each would have a total NI bill of £15,000 — reduced to just £4,500 after the £10,500 allowance. Many small businesses with lower-paid staff pay no employer NI at all.
Medium Businesses (10-50 Employees)
Medium-sized businesses feel the full impact of the rate increase, as the Employment Allowance covers a smaller proportion of their total NI bill. A business with 20 employees averaging £35,000 would see an annual increase of approximately £18,000.
Large Businesses (50+ Employees)
Larger employers face the biggest absolute cost increases. However, the removal of the £100,000 eligibility cap for Employment Allowance means many large businesses can now claim for the first time, partially offsetting the increase.
Claim Employment Allowance — if you have not already, check whether your business is eligible for the £10,500 allowance
Consider salary exchange for pensions — both employer and employee save NI when pension contributions are made through salary exchange. See our pension calculator to model the savings
Review your workforce structure — hiring under-21s or apprentices removes employer NI on most salaries
Employers pay 15% National Insurance on each employee's earnings above the Secondary Threshold of £5,000 a year. The rate and threshold are unchanged from 2025/26.
What is the secondary threshold for 2026/27?
The Secondary Threshold is £5,000 a year (£417 a month, £96 a week). Employer NI is due at 15% on earnings above it. For employees under 21 and apprentices under 25, no employer NI is due until £50,270.
How much employer NI do I pay on a £30,000 salary?
£3,750 a year (£312.50 a month). The calculation is (£30,000 − £5,000) × 15% = £3,750. Employment Allowance of up to £10,500 may reduce this to nil.
