Employer NI Contributions

Key facts

Employer NI rate: 15% from April 2025 (up from 13.8%).
Secondary Threshold reduced to £5,000/year (from £9,100).
Employer NI has no upper limit — it applies to all earnings above the threshold.
Employer NI is an additional cost on top of the employee’s gross salary.
The Employment Allowance (£10,500) can reduce the bill for eligible employers.

What Is Employer NI?

Employer National Insurance (also called Class 1 secondary contributions) is a tax that employers pay on their employees’ earnings. It is charged on top of the employee’s gross pay — it does not come out of the employee’s wages.^[1]

Unlike employee NI, which the worker sees deducted from their payslip, employer NI is invisible to the employee. It is, however, a significant cost of employment that every business must budget for.

Employer NI Rates (2025/26)

From 6 April 2025, employer NI rates changed significantly following the Autumn Budget 2024:^[3]

Detail	2024/25	2025/26
Employer NI rate	13.8%	15%
Secondary Threshold (annual)	£9,100	£5,000
Secondary Threshold (monthly)	£758	£417
Secondary Threshold (weekly)	£175	£96
Upper limit	None	None

Double impact: Employers were hit twice in April 2025 — the rate rose by 1.2 percentage points and the threshold at which NI kicks in dropped by £4,100. For many businesses, the combined effect increased the cost of each employee by several hundred pounds per year.^[4]

How Employer NI Is Calculated

The calculation is straightforward: take the employee’s gross earnings for the pay period, subtract the Secondary Threshold, and multiply the remainder by 15%.^[1]

Employer NI = 15% × (gross earnings − Secondary Threshold)
If earnings are below the Secondary Threshold, employer NI is £0
There is no upper limit — 15% applies to all earnings above the threshold
Calculated per pay period (weekly, monthly, etc.) in line with your payroll cycle

Worked Examples

Example 1 — employee earning £25,000/year:

Earnings above Secondary Threshold: £25,000 − £5,000 = £20,000
Employer NI: 15% × £20,000 = £3,000/year
Monthly employer NI: £250

Example 2 — employee earning £50,000/year:

Earnings above Secondary Threshold: £50,000 − £5,000 = £45,000
Employer NI: 15% × £45,000 = £6,750/year
Monthly employer NI: £562.50

Example 3 — employee earning £100,000/year:

Earnings above Secondary Threshold: £100,000 − £5,000 = £95,000
Employer NI: 15% × £95,000 = £14,250/year
Monthly employer NI: £1,187.50

Cost Comparison: 2024/25 vs 2025/26

The table below shows the increase in employer NI for different salary levels:

Annual Salary	Employer NI 2024/25	Employer NI 2025/26	Increase
£12,570	£479	£1,136	£657
£25,000	£2,194	£3,000	£806
£35,000	£3,574	£4,500	£926
£50,000	£5,644	£6,750	£1,106
£75,000	£9,094	£10,500	£1,406
£100,000	£12,544	£14,250	£1,706

What Earnings Are Subject to Employer NI?

Employer NI applies to most forms of cash remuneration:^[2]

Salary and wages
Overtime pay
Bonuses and commissions
Statutory sick pay and statutory maternity/paternity pay
Holiday pay

Employer NI does not apply to:

Pension contributions made by the employer
Benefits in kind (these attract Class 1A NI instead)
Dividends paid to shareholder-directors
Salary sacrifice amounts (NI is calculated on the reduced salary)

Ways to Reduce Employer NI

There are several legitimate ways to reduce your employer NI bill:

Method	How It Works	Annual Saving (per employee)
Employment Allowance	Claim up to £10,500 off your total employer NI bill	Up to £10,500 (shared across all employees)
Salary sacrifice (pensions)	Employee gives up salary in exchange for employer pension contributions	15% of sacrificed amount
Salary sacrifice (cycle to work, EVs)	Employee sacrifices salary for qualifying benefits	15% of sacrificed amount
Hiring under-21s / apprentices	0% employer NI up to £50,270 (categories H and M)	Up to £6,791
Hiring veterans	0% employer NI up to £50,270 in first year of civilian employment (category V)	Up to £6,791

Tip: Salary sacrifice for pension contributions saves both the employer and the employee NI. The employer saves 15% and the employee saves 8% (or 2% above the UEL) on the sacrificed amount. Many employers pass some of their saving back to the employee as an additional pension contribution.

Paying Employer NI to HMRC

Employer NI is collected through the PAYE system alongside Income Tax and employee NI:^[2]

Payment is due by the 22nd of the following month (electronic payment) or 19th (cheque)
Quarterly payments are available if your average monthly payment is below £1,500
You report employer NI on each Full Payment Submission (FPS) through RTI
Use an Employer Payment Summary (EPS) to claim Employment Allowance or report no payments

Frequently Asked Questions

How much employer NI do I pay per employee?

You pay 15% on all earnings above £5,000 per year (£417/month). For example, on a £30,000 salary you would pay 15% on £25,000, which is £3,750 per year. There is no upper earnings cap for employer NI.

Why did employer NI go up in April 2025?

The government increased employer NI from 13.8% to 15% and reduced the Secondary Threshold from £9,100 to £5,000 as part of the Autumn Budget 2024. This was announced to raise revenue for public services, particularly the NHS and social care.

Does employer NI come out of the employee’s pay?

No. Employer NI is an additional cost paid by the employer on top of the employee’s gross salary. It does not reduce the employee’s take-home pay. However, it does increase the total cost of employment.

Is there a cap on employer NI contributions?

No. Unlike employee NI (which drops to 2% above the Upper Earnings Limit), employer NI is charged at a flat 15% on all earnings above the Secondary Threshold with no upper limit. The more you pay an employee, the more employer NI you owe.

Sources

National Insurance rates and categories — GOV.UK
Running payroll: Employer NI contributions — GOV.UK
Rates and thresholds for employers 2025 to 2026 — GOV.UK
Autumn Budget 2024: employer National Insurance — GOV.UK