Employer National Insurance contributions in the UK are charged at 15% on all employee earnings above the secondary threshold of £5,000 per year, following changes introduced in April 2025 that both raised the rate from 13.8% and lowered the threshold from £9,100. For a business with ten employees each earning £30,000, this means an annual employer NI bill of approximately £37,500 before any reliefs are applied. Eligible employers can offset up to £10,500 through Employment Allowance, reducing the effective cost significantly for smaller firms. The changes represent one of the largest increases to employment taxes in a decade, adding roughly £900 per employee per year compared to the previous 2024/25 rates. This calculator provides an accurate breakdown of your employer NI liability for the current tax year, factoring in Employment Allowance eligibility and multiple employees at different salary levels.
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How to Use This Calculator
Enter the number of employees and their individual gross annual salaries — the calculator handles different salary levels across your team.
Indicate whether you qualify for Employment Allowance — if eligible, up to £10,500 will be deducted from your total employer NI bill.
Review the per-employee and total annual breakdown, which shows the NI cost for each salary band and your aggregate liability.
Compare against 2024/25 rates using the toggle to see exactly how much more you are paying under the new thresholds and rates.
What Changed With Employer NIC in April 2025?
The Autumn Budget 2024 raised employer NIC from 13.8% to 15% and dropped the secondary threshold from £9,100 to £5,000, increasing employer costs by £800–£1,200 per employee for most SMEs.
Two changes hit simultaneously from 6 April 2025, making this the biggest shift in employer costs in a decade:
- Rate increase: Employer NIC rose from 13.8% to 15% (a 1.2 percentage point increase)
- Threshold reduction: The secondary threshold dropped from £9,100 to £5,000, meaning NIC is payable on £4,100 more of each employee’s earnings
The combined effect is significant. For an employee on £30,000, employer NIC rose from £2,884 to £3,750 — an increase of £866 per year (+30%). For a team of 10 at that salary, the total increase is £8,660 before any Employment Allowance offset.
To partially offset the impact on small businesses, the government increased the Employment Allowance from £5,000 to £10,500 and removed the £100,000 eligibility cap, meaning more employers can claim relief.
How Does the Employment Allowance Work?
The Employment Allowance reduces your total employer NIC bill by up to £10,500 per year. It applies per business (not per employee) and is available to employers whose total employer NIC liability was under £100,000 in the previous tax year.
The Employment Allowance is a straightforward deduction from your annual employer NIC bill. If your total employer NIC liability is £8,000, the EA wipes it out entirely. If it is £15,000, the EA reduces it to £4,500.
Key eligibility rules:
- Not available to sole director companies — if you are the only employee and a director, you cannot claim
- Previous year NIC under £100,000 — if your employer NIC bill exceeded £100,000 last year, you are not eligible
- Connected companies share one allowance — group companies cannot each claim £10,500
- Claim via payroll software — set the EA indicator in your first FPS of the tax year
For a business with 3–4 employees on average salaries, the Employment Allowance can eliminate employer NIC entirely. The calculator above spreads the EA saving across your employees so you can see the per-head impact.
Who Is Exempt From Employer NIC?
Certain groups are exempt from employer NIC, including apprentices under 25, employees under 21, and veterans in their first year of civilian employment. Self-employed contractors pay Class 4 NIC instead.
While most employers pay 15% on earnings above the secondary threshold, HMRC provides relief for specific employee categories:
- Apprentices under 25: 0% employer NIC on earnings up to £50,270 (upper secondary threshold). Only the 15% rate applies above this level
- Employees under 21: Same relief as apprentices — 0% on earnings up to the upper secondary threshold
- Armed forces veterans: 0% employer NIC on earnings up to £50,270 for the first 12 months of civilian employment
- Freeport employees: 0% employer NIC on earnings up to £25,000 for qualifying roles in designated freeport areas
These exemptions can be combined with the Employment Allowance. If you employ a mix of apprentices and regular staff, the exemptions reduce your total NIC bill before the EA is applied.
Reducing Your Employer NIC Bill
Beyond the Employment Allowance, salary sacrifice schemes (pension, cycle-to-work, EVs) reduce gross pay before NIC is calculated, saving both employer and employee NIC on the sacrificed amount.
Several legitimate strategies reduce the total NIC cost of your workforce:
Salary Sacrifice Schemes
When employees sacrifice salary for benefits (pension, cycle-to-work, electric vehicles), the sacrificed amount is deducted before NIC is calculated. This saves both employer NIC (15%) and employee NIC (8%), creating a genuine win-win.
For example, an employee who sacrifices £5,000 into their pension saves £400 in employee NIC (8%). The employer saves £750 in employer NIC (15%) on the same amount. That is £1,150 in combined NIC savings from a single arrangement.
Payroll Software
Manual NIC calculations are error-prone. Overpaying employer NIC is more common than most businesses realise — particularly when threshold changes are missed or the Employment Allowance is not claimed correctly. Payroll software from £3–£6 per employee per month handles NIC calculations, EA claims, and RTI filing automatically.
Apprenticeship Levy Explained
Employers with an annual payroll above £3 million pay the Apprenticeship Levy at 0.5% of their total payroll, minus a £15,000 annual allowance. Most SMEs are exempt.
The Apprenticeship Levy is separate from employer NIC but often calculated alongside it. Only employers with a total annual pay bill exceeding £3 million are affected.
The calculation is straightforward: 0.5% of your total annual payroll, minus a £15,000 allowance. For a business with a £5 million payroll, the levy is £10,000 per year (£25,000 gross levy minus £15,000 allowance).
Levy payments go into a Digital Apprenticeship Service account and can be used to fund apprenticeship training. Unused funds expire after 24 months. Connected companies share one £15,000 allowance, split however they choose.
The April 2025 NI changes increased employer costs by £800-£1,200 per employee for most SMEs. The Employment Allowance (£10,500) can offset this entirely for small businesses with 3-5 employees on average salaries.
Employer NIC at a Glance: 7 Common Salary Bands
The table below shows employer NIC at seven UK salary levels using 2025/26 rates (15% above £5,000), before any Employment Allowance.
| Gross Salary | Employer NIC | NIC as % of Salary | Monthly NIC |
|---|---|---|---|
| £20,000 | £2,250 | 11.3% | £187.50 |
| £25,000 | £3,000 | 12.0% | £250.00 |
| £30,000 | £3,750 | 12.5% | £312.50 |
| £35,000 | £4,500 | 12.9% | £375.00 |
| £40,000 | £5,250 | 13.1% | £437.50 |
| £50,000 | £6,750 | 13.5% | £562.50 |
| £75,000 | £10,500 | 14.0% | £875.00 |
Source: HMRC 2025/26 rates. Employment Allowance (£10,500) not applied.
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