Employer NI Calculator 2026/27: 15% Rate + Worked Examples

The Numbers You Need

For 2026/27 (6 April 2026 onwards), the employer National Insurance rates and thresholds are:

Parameter	2026/27	2025/26
Employer NI rate	15%	15%
Secondary threshold	£5,000/year	£5,000/year
Employment Allowance	£10,500	£10,500
Upper Secondary Threshold (under 21)	£50,270	£50,270
Apprentice Upper Secondary Threshold	£50,270	£50,270

The 15% rate and £5,000 threshold were introduced in April 2025, replacing the previous 13.8% rate and £9,100 threshold. For 2026/27 these remain unchanged, but many employers are still adjusting to the increased cost.

How the Calculation Works

Employer NI is calculated on each employee's earnings above the secondary threshold. The formula is straightforward:

Employer NI = (Gross pay - Secondary threshold) × 15%

For an employee earning £30,000 per year:

• Annual earnings above threshold: £30,000 - £5,000 = £25,000
• Employer NI: £25,000 × 15% = £3,750 per year
• Monthly cost: £3,750 ÷ 12 = £312.50 per month

Compare this to the old system (13.8% on earnings above £9,100):

• Old calculation: (£30,000 - £9,100) × 13.8% = £2,884.20
• Difference: £3,750 - £2,884.20 = £865.80 more per employee per year

That is a 30% increase in employer NI for an employee on £30,000.

Employment Allowance

The Employment Allowance lets eligible employers reduce their NI bill by up to £10,500 per year. This was increased from £5,000 to £10,500 in April 2025 specifically to offset the rate increase for smaller employers.

Who qualifies?

• Employers with a total NI liability under £100,000 in the previous tax year
• Companies, charities, community amateur sports clubs, and individuals employing care or support workers
• You cannot claim if your only employee is a director (unless you have other employees too)

How it works in practice:

For a business with 5 employees each earning £30,000:

• Total employer NI: 5 × £3,750 = £18,750
• Less Employment Allowance: £18,750 - £10,500 = £8,250 net NI bill
• Effective saving: 56% reduction in employer NI

For very small employers, the Employment Allowance can eliminate the NI bill entirely. A sole employee on £30,000 generates £3,750 of employer NI — well within the £10,500 allowance.

Worked Example: Mixed Salary Payroll

Here is a realistic example for a small accountancy practice with 4 staff:

Employee	Salary	Employer NI
Senior accountant	£55,000	£7,500
Accountant	£38,000	£4,950
Trainee	£24,000	£2,850
Admin	£22,000	£2,550
Total	£139,000	£17,850

After Employment Allowance: £17,850 - £10,500 = £7,350 net employer NI

Without the increased allowance (old £5,000 EA): £17,850 - £5,000 = £12,850 — so the allowance increase saves this practice £5,500 per year.

Under-21s and Apprentices

Employers pay 0% NI on earnings up to £50,270 for:

• Employees under 21
• Apprentices under 25

Above £50,270, the standard 15% rate applies. This relief is applied automatically through your payroll software using the correct NI category letter (M for under 21, H for apprentices).

For a 19-year-old apprentice earning £20,000: employer NI = £0 (earnings below £50,270 upper secondary threshold).

The Real Cost to Your Business

When budgeting for staff costs, employer NI is one of several on-costs. For a £30,000 salary:

Cost	Amount
Gross salary	£30,000
Employer NI (15%)	£3,750
Pension (3% minimum)	£900
Total employment cost	£34,650

The employee costs you 15.5% more than their headline salary. For higher earners, the percentage is even greater because the £5,000 threshold becomes proportionally smaller.

How to Reduce Your Employer NI

Legitimate strategies to manage employer NI costs:

• Claim Employment Allowance — if you have not already, check eligibility and claim via your payroll software or HMRC's Basic PAYE Tools
• Salary sacrifice — pension contributions, cycle to work, and electric car schemes reduce the earnings on which NI is calculated
• Hire under-21s and apprentices — 0% employer NI up to £50,270
• Review director pay structures — for owner-managed companies, the optimal salary/dividend split has shifted since the rate increased

Calculate Your Exact Liability

Use the MBridge Employer NI Calculator to:

• Calculate employer NI for individual employees or your whole payroll
• Compare 2025/26 and 2026/27 costs side by side
• Apply Employment Allowance automatically
• Model salary sacrifice savings
• Export results for your payroll records

It is free for your first calculation and takes under a minute.