# UK Employer National Insurance: Rates, Thresholds, and the £10,500 Allowance

A comprehensive guide to UK employer Class 1 National Insurance contributions, explaining the 15% rate, the £5,000 threshold, exemptions, and how to claim the £10,500 Employment Allowance.

**Published:** 2026-07-03  
**Updated:** 2026-07-03  
**Source:** https://aztajournal.com/gb/employer-national-insurance-rates-allowance

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> This guide outlines the UK employer National Insurance contributions rules following major legislative reforms. Learn how the 15% rate and reduced £5,000 threshold affect your payroll, utilize our calculation formula, and discover how to claim the expanded £10,500 Employment Allowance.

As a UK employer, the amount of Class 1 National Insurance you pay on staff wages depends on each employee's annual earnings above the secondary threshold. Under the current rules, you will pay **15%** on all eligible earnings above the **£5,000** threshold. This system is designed to collect contributions directly from employers on behalf of their workforce.

## Key Takeaways: Employer NIC Rate Changes

The statutory landscape for employer contributions has undergone significant adjustments to rates and starting thresholds. Under the National Insurance Contributions (Secondary Class 1 Contributions) Act 2025, employers face a higher overall rate alongside a lower entry starting point.

1. The secondary Class 1 National Insurance rate is 15%, increasing from the previous rate of 13.8%.
2. The secondary threshold has decreased to £5,000 per year, meaning contributions start at a lower salary level.
3. The maximum Employment Allowance has increased to £10,500 to help eligible small businesses offset these rising payroll costs.

## How much employer National Insurance will I pay on my staff wages?

You will pay 15% on each employee's gross yearly earnings that exceed the secondary threshold of £5,000. To calculate your annual liability for any individual staff member, you must deduct the £5,000 threshold from their gross salary and multiply the remaining balance by 15%.

This calculation can be expressed as a standard payroll formula:

> Employer NIC = (Annual Salary − £5,000) × 15%
>
> — National Insurance Contributions (Secondary Class 1 Contributions) Act 2025

Because the threshold applies to each individual worker, you calculate the liability for each person on your payroll separately. You then sum these individual totals to determine your collective monthly payment owed to HM Revenue and Customs.

## What are the new Employer NIC thresholds for 2025/26 and 2026/27?

The current threshold rules establish lower starting limits for contributions across weekly, monthly, and yearly pay intervals. The table below outlines how these new 2025/26 and 2026/27 figures compare against the historical 2024/25 parameters.

| Parameter | 2024/25 Tax Year | 2025/26 and 2026/27 Tax Years |
| --- | --- | --- |
| Employer NIC Rate | 13.8% | 15.0% |
| Secondary Threshold (Annual) | £9,100 | £5,000 |
| Secondary Threshold (Monthly) | £758 | £417 |
| Secondary Threshold (Weekly) | £175 | £96 |
| Employment Allowance | £5,000 | £10,500 |

## Employer NIC calculations at £25,000, £35,000, and £50,000

To understand the financial impact on your business, it is helpful to look at standard salary benchmarks. The following table demonstrates the precise annual liabilities for employees earning common gross UK salaries.

| Annual Salary | Taxable Earnings (Above £5,000) | Annual Employer NIC Owed |
| --- | --- | --- |
| £25,000 | £20,000 | £3,000 |
| £35,000 | £30,000 | £4,500 |
| £50,000 | £45,000 | £6,750 |

## Who is exempt from paying the 15% Employer National Insurance?

Certain categories of employees qualify for a 0% employer rate up to their specific upper secondary threshold. In these instances, you do not pay the standard 15% rate on their earnings until they surpass the higher limits set by HM Revenue and Customs.

- Employees who are under the age of 21.
- Qualifying apprentices who are under the age of 25.
- Eligible armed forces veterans during their first year of civilian employment.
- New employees working physically within designated Freeports or special tax sites.

## How does the £10,500 Employment Allowance reduce your bill?

The Employment Allowance acts as a direct credit that offsets your cumulative employer secondary Class 1 National Insurance liability. By claiming this relief, eligible businesses can reduce their overall pay-as-you-earn bill by up to £10,500 per tax year.

Most businesses and charities with employees qualify for this allowance. However, companies where a single director is the sole employee with no other staff on the payroll are explicitly excluded from claiming the relief.

### When did the 15% Employer National Insurance rate come into effect?

The 15% employer rate came into effect on 6 April 2025 under the National Insurance Contributions (Secondary Class 1 Contributions) Act 2025.

### What is the annual secondary threshold for Employer NICs now?

The annual secondary threshold for employers is set at £5,000, which equates to £417 per month or £96 per week.

### Can single-director companies claim the £10,500 Employment Allowance?

No, companies where the sole director is the only employee paid above the secondary threshold are excluded from claiming the £10,500 Employment Allowance.

### Does the 15% Employer NI rate apply to employees under 21?

No, a 0% employer rate applies to employees under the age of 21 on earnings up to the upper secondary threshold.