Work and career · United Kingdom · 2024/25 / 2025/26 / 2026/27
UK employer NI from April 2025: 15% above £5,000
This article was created with artificial intelligence support.
Since 6 April 2025, UK employers pay National Insurance at 15 percent on each employee’s earnings above £5,000 a year, up from 13.8 percent above £9,100. On a £35,000 salary that adds about £926 a year before any allowance. The Employment Allowance rose from £5,000 to £10,500 at the same time, which absorbs much of the increase for small employers, and employees’ own National Insurance did not change.
What changed on 6 April 2025
The National Insurance Contributions (Secondary Class 1 Contributions) Act 2025 made three changes from the 2025/26 tax year. It raised the employer rate of Class 1 National Insurance from 13.8 percent to 15 percent. It cut the secondary threshold, the yearly earnings an employer pays nothing on, from £9,100 to £5,000. And it raised the Employment Allowance, which an eligible employer deducts from its yearly bill, from £5,000 to £10,500, while removing the rule that shut out employers whose bill in the previous year was £100,000 or more.
The rate and threshold stay the same in 2026/27. The £5,000 threshold was due to rise with the Consumer Prices Index from April 2028, but at Budget 2025 the government said it will stay at £5,000 until April 2031, to be set in legislation in early 2028. Employee National Insurance is a separate charge and did not change: 8 percent between £12,570 and £50,270 and 2 percent above, in 2024/25, 2025/26 and 2026/27.
What each employee now costs
Both changes push the bill up, and the lower threshold hits every employee who earns more than £5,000. For anyone on more than £9,100 the extra cost works out at £505.80 plus 1.2 percent of salary a year. At £25,000, employer National Insurance goes from £2,194 to £3,000, an extra £806. At £50,000 the increase is £1,106, and at £80,000 it is £1,466.
Low-paid and part-time staff see the biggest jump relative to their pay. Someone earning £12,000 a year used to cost £400 in employer National Insurance; from April 2025 they cost £1,050, more than twice as much, because £4,100 of their pay that was below the old threshold is now charged too. For employers with many part-time staff, that threshold cut matters more than the rate rise.
Employer cost per employee, 2024/25 to 2026/27
The table shows employee National Insurance, take-home pay, employer National Insurance and the total cost of employment for one employee in England, before the Employment Allowance. At £35,000, employer National Insurance rises from £3,574 to £4,500, so the employee costs £39,500 a year instead of £38,574. The 2026/27 rows match 2025/26, and take-home pay is the same in every year.
Example assumptions
Annual model estimate
Salary example for a tax resident. Eligibility and actual payment dates may differ.
Employer figures are before the Employment Allowance, which applies to the employer’s whole payroll and is not modelled.
An employee aged 35 whose salary is the only pay. Employer pension contributions, the under-21 and apprentice reliefs, student loans and benefits in kind are not included.
- Model year
- 2024/25 / 2025/26 / 2026/27
- Currency
- GBP
- Region
- England
- Age
- 35
- Children
- 0
| Annual gross salary | Scenario | Employee contributions | Annual net pay | Employer Contributions | Employer cost | Calculator |
|---|---|---|---|---|---|---|
| £12,000 | 2024/25 rules | £0 | £12,000 | £400 | £12,400 | Open these settings |
| £12,000 | 2025/26 rules | £0 | £12,000 | £1,050 | £13,050 | Open these settings |
| £12,000 | 2026/27 rules | £0 | £12,000 | £1,050 | £13,050 | Open these settings |
| £25,000 | 2024/25 rules | £994 | £21,520 | £2,194 | £27,194 | Open these settings |
| £25,000 | 2025/26 rules | £994 | £21,520 | £3,000 | £28,000 | Open these settings |
| £25,000 | 2026/27 rules | £994 | £21,520 | £3,000 | £28,000 | Open these settings |
| £35,000 | 2024/25 rules | £1,794 | £28,720 | £3,574 | £38,574 | Open these settings |
| £35,000 | 2025/26 rules | £1,794 | £28,720 | £4,500 | £39,500 | Open these settings |
| £35,000 | 2026/27 rules | £1,794 | £28,720 | £4,500 | £39,500 | Open these settings |
| £50,000 | 2024/25 rules | £2,994 | £39,520 | £5,644 | £55,644 | Open these settings |
| £50,000 | 2025/26 rules | £2,994 | £39,520 | £6,750 | £56,750 | Open these settings |
| £50,000 | 2026/27 rules | £2,994 | £39,520 | £6,750 | £56,750 | Open these settings |
| £80,000 | 2024/25 rules | £3,611 | £56,957 | £9,784 | £89,784 | Open these settings |
| £80,000 | 2025/26 rules | £3,611 | £56,957 | £11,250 | £91,250 | Open these settings |
| £80,000 | 2026/27 rules | £3,611 | £56,957 | £11,250 | £91,250 | Open these settings |
How other countries compare
The table shows how annual take-home pay changes between the two tax years shown, as a percentage of take-home pay in the earlier year. Each country uses its own middle example salary and settings. The last column shows, for every country, the take-home share of this article’s example salary of £39,039 a year, converted into the local currency.
| Country | Tax years compared | Take-home change from the earlier year | Salary in local currency | Take-home share of the same salary |
|---|---|---|---|---|
| Cyprus | 2025 → 2026 | +2.38% | €45,910 | 79.5% |
| Germany | 2025 → 2026 | +0.21% | €45,910 | 65.6% |
| United Kingdom | 2025/26 → 2026/27 | 0% | £39,039 | 81% |
| Poland | 2025 → 2026 | 0% | PLN 200,973 | 65.1% |
| United States | 2025 → 2026 | -0.02% | $51,534 | 79% |
Converted at the exchange rates of 2 October 2026. Each country uses the calculator’s default profile and its latest enacted tax year. Living costs are not compared.
The Employment Allowance covers more of the bill
The calculator works out employer National Insurance for one employee and does not deduct the Employment Allowance, because the allowance belongs to the employer’s whole payroll for the year. You claim it through payroll software by setting the Employment Allowance indicator on an Employment Payment Summary, and it reduces the employer Class 1 National Insurance you pay until the £10,500 is used up.
For a small employer the allowance can outweigh the increase. £10,500 covers the full bill for ten part-time employees on £12,000, at £1,050 each. Three employees on £25,000 cost £3,000 each, so the allowance covers all three and part of a fourth. Take an employer with four staff on £25,000: in 2024/25 their bill was £8,777, and the £5,000 allowance left £3,777 to pay. In 2025/26 the bill is £12,000, and the £10,500 allowance leaves £1,500. HMRC estimated that around 250,000 employers would pay less and 820,000 would see no change, while around 940,000 would pay more.
Larger employers can now claim too, but £10,500 is a small share of a big payroll, so the higher rate and lower threshold outweigh it.
Who cannot claim the allowance
A company whose only employee paid above the secondary threshold is its sole director cannot claim. Neither can a business or public body that does more than half its work in the public sector, such as for local councils or NHS services, unless it is a charity. Staff employed for personal, household or domestic work do not count unless they are care or support workers, and earnings that fall under the IR35 off-payroll working rules cannot be included. Where companies are connected, only one of them can claim, and you can claim against one payroll only.
What it means for pay rises
Above the threshold, every extra pound of salary now costs the employer £1.15 instead of £1.138. A rise from £35,000 to £50,000 costs the employer £17,250 a year under the 2025/26 rules, against £17,070 under the 2024/25 rules, with £2,250 of it going to employer National Insurance. While the employer has Employment Allowance left for the year, the allowance absorbs that National Insurance; once it is used up, the employer pays it in full.
The employee sees none of this on the payslip. At £35,000, take-home pay is £28,720 in both 2024/25 and 2025/26, and employee National Insurance is £1,794 in each year. The cost can still reach employees indirectly: the Office for Budget Responsibility, quoted in HMRC’s policy paper, judged that higher employer costs would lead to lower wages and profits, with part passed on to prices.
Two reliefs reduce the bill for some staff and are not in the calculator. For employees under 21, and apprentices under 25, the employer rate is 0 percent on earnings up to £50,270. The calculator charges 15 percent above £5,000 for every employee, so for these staff its employer figures are too high.
Checks for employers
- Open each salary in the calculator and read the Full Employment Cost panel for the employer National Insurance before the allowance.
- Add up employer National Insurance for all staff for the year and subtract up to £10,500 if you can claim the Employment Allowance.
- Check the exclusions before you claim: sole-director companies, mainly public-sector work, domestic staff and connected companies.
- Mark employees under 21 and apprentices under 25 with the right National Insurance category in payroll, as the calculator overstates their cost.
- Budget pay rises at £1.15 per extra pound above £5,000 once the allowance is used up.
See your own numbers
The articles use example figures. Enter your salary in the calculator to see your own result.
Sources and model coverage
What the estimate covers
The calculator estimates employment income using its supported country rules and selected inputs. Benefits, collective agreements and personal circumstances that are not modelled are excluded. Official rules determine your actual liability.
- Examples assume no pension contribution. The pension annual allowance and its taper are not modelled.
Official sources
- legislation.gov.uk – National Insurance Contributions (Secondary Class 1 Contributions) Act 2025, section 2: secondary threshold
- legislation.gov.uk – National Insurance Contributions (Secondary Class 1 Contributions) Act 2025, section 3: employment allowance
- HMRC – Changes to the secondary threshold, the secondary Class 1 rate and the Employment Allowance (policy paper)
- HM Treasury and HMRC – Budget 2025: overview of tax legislation and rates, section 2.2: Secondary Threshold maintained until April 2031
- HMRC – Rates and thresholds for employers 2024 to 2025
- HMRC – Rates and thresholds for employers 2025 to 2026
- HMRC – Rates and thresholds for employers 2026 to 2027
- GOV.UK – Employment Allowance: what you’ll get
- GOV.UK – Employment Allowance: check if you’re eligible
- GOV.UK – Employment Allowance: how to claim