Employer NI calculator (2026/27)

Employer NI calculator

2026/27 Class 1 secondary thresholds

Employer NI is calculated on cash earnings in the pay period that sit between the Secondary Threshold (ST) and any applicable upper threshold. For most adult employees on category A, the only threshold that matters is the ST, once you cross it, every extra pound attracts 15% employer NI.

For under-21s (category M), apprentices under 25 on an approved apprenticeship (H) and qualifying veterans in their first 12 months of civilian employment (V), employer NI is 0% between the Secondary Threshold and the relevant Upper Secondary Threshold (UST / AUST / VUST), then 15% above it. Pick the correct category letter in payroll to claim the relief.

Worked example — £40,000 salaried employee

A finance manager on £40,000 a year, category A, no salary sacrifice and no benefits in kind. The employer's ENIC arithmetic for 2026/27 is:

1. Strip out the Secondary Threshold: £40,000 − £5,000 = £35,000 of NIable pay.
2. Apply the 15% main rate: £35,000 × 15% = £5,250 of employer NI per year.
3. Spread it across the year: roughly £437.50 a month, or £100.96 a week.
4. Set Employment Allowance against it: an eligible employer with one employee at this level can absorb the full £5,250 inside the £10,500 Employment Allowance, effective employer NI on this one employee is £0 for the year.

Add a £4,000 bonus paid in December and that period's gross jumps from roughly £3,333 to £7,333. ENIC for that period is (£7,333 − £416.67) × 15% ≈ £1,037 against an ordinary month of roughly £437.50. Employer NI on bonuses lands in the period the bonus is paid, there is no annual smoothing for non-directors.

What ENIC is — and what it is not

Employer National Insurance has several names in the wild: ENIC, Class 1 secondary NICs, employer NICs, the “employer's side” or simply “NI on the payroll”. They all refer to the same thing, the National Insurance contribution paid by the business on top of an employee's gross pay. ENIC does not appear on the employee's payslip as a deduction, because the employee never sees it: it is a payroll cost the employer settles directly with HMRC.

That distinction matters during pay negotiations and budgeting. When a candidate negotiates an extra £5,000 of salary, the employer's true cost is closer to £5,750 once 15% ENIC is added, and more again once pension contributions, the Apprenticeship Levy (large employers) and other on-costs are factored in. A pure salary figure understates the true cost of employment by around the ENIC rate, plus pension on-costs.

ENIC is also separate from Class 1A NI, which is paid by employers on most taxable benefits in kind — company cars, private medical insurance, gym memberships and so on. Class 1A is reported once a year on form P11D(b) at the same 15% rate, but settled separately from payroll cycles. The calculator above does not include Class 1A; if benefits in kind are payrolled rather than reported on P11D, their cash-equivalent value flows through ordinary employer NI instead.

Employment Allowance — £10,500 for 2026/27

The Employment Allowance lets eligible employers reduce their annual employer-NI bill by up to £10,500. It is claimed inside payroll software by ticking the relevant box in the Employer Payment Summary (EPS) at the start of the tax year. The allowance is then drawn down month by month against accruing employer NI until either the £10,500 cap or the end of the tax year is reached.

Most small and medium employers qualify. The most common exclusions are single-director companies with no other employees, most of the public sector, and businesses whose total employer-NI bill in the previous tax year exceeded £100,000 (this last test scopes the allowance to small employers). De-minimis state-aid rules can also apply for certain regulated sectors, check HMRC's detailed guidance before claiming.

For a five-person team each on £35,000 a year, employer NI before the allowance is 5 × (£35,000 − £5,000) × 15% = £22,500. After £10,500 of Employment Allowance the net bill is £12,000. The calculator above applies the cap automatically when the box is ticked.

Frequently asked questions

What is Employer National Insurance (ENIC) in 2026/27?

Employer National Insurance — sometimes called ENIC, secondary Class 1 NI or "employer NICs" — is the National Insurance an employer pays on top of an employee's gross pay. For 2026/27 the main employer rate is 15%, applied to earnings above the Secondary Threshold of £5,000 per year (£96.15 per week). The employer pays this in addition to PAYE and the employee's own NI deduction.

How do I calculate employer NI on a £40,000 salary?

Subtract the Secondary Threshold of £5,000 from the annual salary to get the NIable amount, then apply 15%. For a £40,000 salaried employee in 2026/27: (£40,000 − £5,000) × 15% = £5,250 of employer NI per year, or roughly £437.50 per month. Employment Allowance, if claimed, reduces this against the employer's total annual employer-NI bill, not per employee.

What is the Employment Allowance for 2026/27?

The Employment Allowance reduces an eligible employer's annual employer-NI bill by up to £10,500 for 2026/27. It is claimed through payroll software (RTI) and applied against employer NI as it accrues, until the £10,500 cap is reached. Most small businesses qualify; sole-director companies and the public sector typically do not.

Does employer NI apply to bonuses, overtime and commission?

Yes. Employer NI is calculated on cash earnings in the pay period, including bonuses, overtime, commission and most allowances. Some benefits in kind have their own rules (Class 1A) and are reported via P11D and P11D(b) rather than in payroll-period employer NI.

Is employer NI the same for under-21s, apprentices and veterans?

No. Employees under 21, apprentices under 25 on an approved apprenticeship, and qualifying veterans in their first 12 months of civilian employment have a higher employer-side threshold, the Upper Secondary Threshold (UST), Apprentice Upper Secondary Threshold (AUST) or Veterans Upper Secondary Threshold (VUST). Employer NI is 0% on earnings between the Secondary Threshold and the relevant upper-secondary threshold, then 15% above it. Use the correct NI category letter in payroll to claim this.

Is this employer NI calculator a substitute for payroll software?

No. This calculator is educational. Real payroll uses period-by-period figures with rounding rules set out in HMRC's CWG2 employer guide, and reflects category letters, directors' rules, statutory pay and Employment Allowance state. Always reconcile against HMRC-recognised payroll software before paying employer NI to HMRC.

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Related reading

• National Insurance on your payslip (UK, 2026/27)

  The employee side: primary threshold, category letters and why NI shifts month to month.

• NI rate changes for April 2026 — before / after

  The 2026/27 NI changes in plain English, with worked examples at £20k, £35k and £60k.

• UK payroll & payslip hub

  All PayslipIQ UK guides: tax codes, student loans, deduction checkers and the free payslip check.

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Educational guidance only — not regulated tax, financial or payroll advice. Always verify figures with HMRC and your payroll team. Run a free payslip check via the UK payslip checker.