Employer's National Insurance & Cost of Employment Calculator
Work out Class 1 secondary National Insurance, the Employment Allowance, auto-enrolment pension and the true total cost of a hire — for the 2024/25, 2025/26 and 2026/27 tax years.
Employer cost results
Full cost of employment breakdown
| Gross pay (salary + bonus) | £35,000 |
| Employer's National Insurance | £4,500 |
| Class 1A NI on benefits in kind | £0 |
| Benefits in kind | £0 |
| Less Employment Allowance | £0 |
| Employer pension contribution | £863 |
| Total cost of employment | £40,363 |
An estimate for guidance only, not financial, tax or legal advice. It ignores contracted-out rates and the zero-rate bands for under-21s, apprentices under 25, armed forces veterans and freeport or investment zone employees, any of which can reduce your bill substantially.
Employment Allowance calculator
The Employment Allowance reduces your total employer Class 1 National Insurance bill by up to £10,500 a year. It is claimed once per business through payroll, not once per employee, and it applies only to secondary Class 1 NI — never to the employee's own contributions.
Because it is a flat cash allowance, it covers a whole payroll's NI at small headcounts and almost none of it at large ones. Roughly, £10,500 is the employer NI on about £75,000 of a single salary, or a handful of part-time roles.
A limited company whose only employee paid above the secondary threshold is also a director cannot claim it.
Salary sacrifice employer saving calculator
When an employee sacrifices salary into a pension, the sacrificed amount stops being earnings — so employer National Insurance is never charged on it. On a £35,000 salary, a 5% sacrifice of £1,750 cuts the employer NI bill from £4,500.00 to £4,237.50, a saving of £262.50 a year — 15% of everything sacrificed.
Adjust the sacrifice percentage in "More options" above to see the saving for your own figures, or read how salary sacrifice works for the employee side.
Apprenticeship Levy calculator
The Apprenticeship Levy is 0.5% of your annual paybill, less a £15,000 allowance. That allowance means nothing is due until your paybill passes £3,000,000, so most small and mid-sized employers never pay it.
0.5% of £3,500,000 less the £15,000 allowance.
Paybill means total earnings subject to employer Class 1 NI. Levy-paying employers also receive a 10% government top-up on funds in their apprenticeship service account.
Employer National Insurance rates: 2024/25 to 2026/27
| Tax year | Secondary threshold | Employer NI rate | Employment Allowance | Eligibility |
|---|---|---|---|---|
| 2024/25 | £9,100 | 13.8% | £5,000 | Under £100,000 NI bill |
| 2025/26 | £5,000 | 15% | £10,500 | No cap |
| 2026/27 | £5,000 | 15% | £10,500 | No cap |
Employer cost by salary
| Salary | Employer NI 2025/26 | Employer NI 2026/27 | Pension (3% min) | Total cost | On-cost |
|---|---|---|---|---|---|
| £12,570 | £1,136 | £1,136 | £190 | £13,895 | 10.5% |
| £15,000 | £1,500 | £1,500 | £263 | £16,763 | 11.8% |
| £20,000 | £2,250 | £2,250 | £413 | £22,663 | 13.3% |
| £25,000 | £3,000 | £3,000 | £563 | £28,563 | 14.3% |
| £30,000 | £3,750 | £3,750 | £713 | £34,463 | 14.9% |
| £35,000 | £4,500 | £4,500 | £863 | £40,363 | 15.3% |
| £40,000 | £5,250 | £5,250 | £1,013 | £46,263 | 15.7% |
| £45,000 | £6,000 | £6,000 | £1,163 | £52,163 | 15.9% |
| £50,000 | £6,750 | £6,750 | £1,313 | £58,063 | 16.1% |
| £60,000 | £8,250 | £8,250 | £1,321 | £69,571 | 16% |
| £70,000 | £9,750 | £9,750 | £1,321 | £81,071 | 15.8% |
| £80,000 | £11,250 | £11,250 | £1,321 | £92,571 | 15.7% |
| £100,000 | £14,250 | £14,250 | £1,321 | £115,571 | 15.6% |
Total cost is gross salary plus employer's NI plus the minimum 3% auto-enrolment pension on qualifying earnings, before Employment Allowance.
Employer National Insurance FAQ
How do I calculate employer's National Insurance?
Take the employee's gross earnings, subtract the secondary threshold for that tax year (£5,000 in 2025/26 and 2026/27), and multiply what is left by the employer rate of 15%. On £35,000 that is £4,500.00 a year. There is no upper earnings limit for employers.
Is there an upper limit on employer National Insurance?
No. Employee National Insurance drops to 2% above the £50,270 upper earnings limit, but the employer rate of 15% applies to all earnings above the secondary threshold with no cap, so employer NI keeps rising in a straight line with salary.
Does salary sacrifice reduce employer National Insurance?
Yes, and that is usually the point. Sacrificed pay is not earnings, so it escapes employer NI entirely. An employee on £35,000 sacrificing 5% into a pension saves their employer £262.50 a year in NI alone.
How much is the Employment Allowance in 2025/26 and 2026/27?
£10,500 a year, up from £5,000 in 2024/25. It is claimed against your total employer Class 1 NI bill through payroll, once per business rather than per employee, and stops once the full amount has been used.
Do employers pay NI on bonuses?
Yes. Bonuses, commission and overtime are all earnings for Class 1 purposes, so employer NI at 15% applies to them in the pay period they are paid.
What is the minimum employer pension contribution?
Under automatic enrolment the employer must contribute at least 3% of qualifying earnings — the band between £6,240 and £50,270 — with total contributions of at least 8% including the employee's share. Many schemes are instead certified on full basic pay or total pay, which costs more.