When you employ people, you have to pay National Insurance for each employee. This is on top of the National Insurance contributions (NICs) taken from their wages.

Employer National Insurance contributions increased to 15% on 6 April 2025, following the government’s Autumn Budget 2024.

But what exactly changed and how does it affect small business owners? Read on for more information about the employer National Insurance increase, plus the current bands and how to calculate payments.

What is employer National Insurance?
What are the National Insurance bands for employers?
National insurance changes: what employers need to know
How to calculate National Insurance
When do you pay National Insurance?

What is employer National Insurance?

It’s a legal requirement for businesses to pay National Insurance contributions for each of their employees.

It’s important to note that employer NICs are a separate cost to the business, based on an employee’s wages. Employees also pay NICs, which are deducted from their wages.

All National Insurance contributions go towards important services like the NHS and the state pension.

Employers make a secondary contribution to their employees’ Class 1 National Insurance – paid at a percentage of their earnings above a certain threshold.

If you’re looking for information on how the self-employed pay National Insurance, read our dedicated guide.

What are the National Insurance bands for employers?

NICs paid by employers are known as secondary contributions.

For the 2026-27 tax year, NICs are paid at 15% above the £5,000 secondary threshold (which equates to £417 a month or £96 a week).

This threshold and rate remain unchanged from the 2025-26 tax year, but are an increase from the 2024-25 tax year, which saw NICs paid at 13.8% above the secondary threshold of £9,100 a year (which equated to £758 a month or £175 a week).

Employers don’t pay any National Insurance if their employees earn below the secondary threshold.

Rates for employee NICs

You’ll also pay Class 1 National Insurance contributions on behalf of your employees.

You deduct National Insurance from their pay on earnings between:

the primary threshold: £1,048 monthly or £242 weekly
the upper earnings limit: £4,189 monthly or £967 weekly

For the 2026-27 tax year, the main rate of employee National Insurance is 8%. The upper earnings limit is 2%.

National Insurance changes – what do employers need to know?

Current National Insurances rates

From 6 April 2025, the rate paid by employers increased from 13.8% to 15%.

This means the amount you pay in National Insurance for each employee has increased.

	2026-27
National Insurance rate	15%
Annual threshold	£5,000
Monthly threshold	£417
Weekly threshold	£96

How can employers reduce the impact of higher NICs?

To reduce the amount you pay in NICs as an employer, you can claim the employment allowance.

This is £10,500 for the 2026-27 tax year, having increased from £5,000 in the 2024-25 tax year.

Previously, businesses could only claim the employment allowance if their Class 1 National Insurance liabilities were less than £100,000 in the previous tax year, but this rule was removed in April 2025. However, you can’t claim if your company has only one employee who is also a director, or if you do more than half your work in the public sector.

The employment allowance reduces the amount you pay in NICs every time you run payroll until you’ve used up the full allowance or the tax year ends.

It’s important to note that you have to apply for the employment allowance as it isn’t automatically applied.

How to calculate National Insurance as an employer

To work out how much National Insurance you need to pay for each employee, you’ll need to calculate how much they earn above the secondary threshold and multiply this by your NICs rate.

Here’s an example for an employee who earns an annual salary of £45,000 during the 2026-27 tax year:

Their weekly wage would work out at £865, which is £769 above the £96 weekly threshold.

£769 x 15% = £115.35

This means you’d pay a weekly sum of £115.35 in employer contributions (equal to £500 a month and £5,998 a year).

When do you pay National Insurance as an employer?

Employers are required to deduct an employee’s NICs from their salary. This will be done weekly or monthly, depending how you pay your employees.

On top of this, you’ll need to report and pay your employer NICs to HMRC on a regular basis, with payments made in a timely manner.

You’ll also need to pay a 15% rate for Class 1A National Insurance (on work benefits, due 22 July) and Class 1B National Insurance (for PAYE Settlement Agreements, due 22 October).

If you provide taxable expenses and benefits, you must usually submit a P11D and P11D(b) form by 6 July.

Failure to pay NICs on time or incorrect reporting could result in a penalty from HMRC.

Late payment penalties for PAYE and National Insurance start at 1% of the late amount for your first few defaults in a tax year, rising to 4% if you’re late 10 or more times. You’ll also be charged daily interest.

It’s important for businesses to budget for employer NICs as they can have an impact on cash flow.

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Employer National Insurance: rates and thresholds for small businesses