Employer National Insurance 2026/27: New Rates, Thresholds and Employer Costs

Hiring employees involves more than paying salaries. Alongside wages, employers are also responsible for statutory payroll costs, one of the most significant being Employer National Insurance (Employer NI). Understanding how these contributions are calculated is an important part of payroll planning, budgeting, and managing employment costs.

What is Employer National Insurance?

Employer National Insurance, also called Employer NI or secondary Class 1 National Insurance, is a contribution employers pay on top of an employee's gross salary once their earnings pass a set threshold. As rates and thresholds can change from one tax year to another, staying informed helps businesses estimate payroll costs more accurately and prepare for the year ahead. It's calculated through PAYE alongside the employee's own tax and National Insurance, but critically, it comes out of the business, not the employee's pay packet.

For the 2026/27 tax year, employers should familiarise themselves with the latest National Insurance rates and thresholds published by HMRC. Having a clear understanding of these changes not only supports accurate payroll calculations but also helps businesses make informed financial decisions as they grow.

This article explains what Employer National Insurance is, who pays it, the rates and thresholds that apply for 2026/27, and how payroll software can simplify Employer NI calculations.

Did you know? 
Employer NI and employee NI are calculated completely separately, on the same earnings, using different rates and different thresholds. An employee never sees their employer's NI bill reflected in their payslip; it simply doesn't touch their take-home pay.

Key takeaways

• Employer National Insurance is a statutory contribution employers pay, separate from the National Insurance deducted from an employee's own wages.

• The standard rate for 2026/27 is 15%, unchanged from 2025/26.

• It applies to earnings above the Secondary Threshold of £5,000 a year.

• Eligible employers can claim up to £10,500 in Employment Allowance to reduce what they owe.

• Two real changes for 2026/27 sit beneath the unchanged headline rate: day-one Statutory Sick Pay, and an improved Small Employers' Relief rate.

Who actually pays it, and why

Any employer running a PAYE scheme pays employer NI once an employee's earnings cross the Secondary Threshold, whether that's one employee or two hundred. The contribution funds the state pension, the National Health Service (NHS), and a range of other statutory benefits, which is part of why it's mandatory rather than optional the way some benefits schemes are.

For payroll planning purposes, the "why" matters less than the "how much." Employer NI should be budgeted for alongside salary, pension contributions, and any statutory payments, not treated as an afterthought once the offer letter's gone out.

Employer NI rates and thresholds for 2026/27

According to HMRC's official rates and thresholds for 2026 to 2027, the core figures are unchanged from last year:

Quick tip: Not every employee costs the same in employer NI. Employees under 21, apprentices under 25, and veterans in their first year of civilian employment attract 0% employer NI up to £50,270 a year, well above the standard threshold. If your workforce includes any of these categories, check the NI category letter on their payroll record; it's an easy saving to miss.

What's actually new for 2026/27

This is the part that gets skipped in most "rates unchanged" roundups, and it's the part that will actually affect your costs this year.

Statutory Sick Pay is now a day-one right. Under the Employment Rights Act 2025, the three-day waiting period for SSP was removed from 6 April 2026, along with the earnings threshold that previously excluded lower-paid workers. Every employee now qualifies for SSP from their very first day of sickness absence, regardless of how much they earn. This doesn't touch your employer NI rate, but it adds a genuinely new and less predictable cost, especially if you employ part-time or lower-paid staff who were previously outside the SSP net entirely.

Small Employers' Relief has quietly improved. If your total Class 1 National Insurance was £45,000 or less in the previous tax year, you can now recover 109% of statutory payments like maternity and paternity pay, up from 108.5%. Businesses with a higher NI bill still recover 92%. It's a small percentage point, but it's real money back if you qualify.

How Employer NI is actually calculated

The math itself is simple; it's keeping track of it across a growing team that gets complicated.

1. Take the employee's gross annual pay.

2. Subtract £5,000, the annual Secondary Threshold.

3. Multiply what's left by 15%.

Take James, who runs a five-person design studio in Manchester. His newest hire earns £32,000 a year. Subtract the £5,000 threshold and £27,000 remains; apply 15% and James owes £4,050 in employer NI for that one employee, on top of the salary itself. Run that same calculation across a growing team, each on different salaries, some sitting under the under-21 relief and some not, and it's obvious why employer NI is usually the single biggest non-salary cost of hiring, and why manual spreadsheets start creaking well before headcount hits double figures.

Employment Allowance: reduce what you owe

Most small and medium employers can claim Employment Allowance, worth up to £10,500 for 2026/27, directly against their employer NI liability. If your total employer NI bill for the year comes in under that figure, you may end up paying nothing at all.

Eligibility isn't automatic, though. It depends on factors including your total NI bill in the previous tax year and whether your only employee is also a company director, so it's worth re-checking eligibility at the start of each tax year rather than assuming last year's claim rolls over.

Bringing it all together

The headline hasn't changed: 15% above £5,000, same as 2025/26. But "unchanged rate" doesn't mean "nothing to do." Day-one SSP eligibility and the improved Small Employers' Relief rate both affect real payroll costs this year, and Employment Allowance eligibility is worth re-checking rather than assuming.

Zoho Payroll's UK edition calculates employer and employee NI automatically against the correct category letter and threshold, tracks Employment Allowance usage as it's claimed through the year, and generates a National Insurance Contributions Report so you can see exactly where your liability stands without reaching for a calculator.

Frequently asked questions

• What is the employer National Insurance rate for 2026/27? 
  15%, charged on each employee's earnings above the £5,000 Secondary Threshold. Unchanged from 2025/26.
   

• What is the employer NI threshold for 2026/27? 
  The Secondary Threshold is £5,000 a year, or £417 a month, or £96 a week. You only pay employer NI above this amount, with no upper limit.
   

• Has anything actually changed for employer NI in 2026/27? 
  The rate and threshold haven't moved, but two related things have: Statutory Sick Pay is now payable from day one under the Employment Rights Act 2025, and Small Employers' Relief now allows recovery of 109% of statutory payments, up from 108.5%.
   

• How much is Employment Allowance in 2026/27? 
  Up to £10,500, which eligible employers can use to directly reduce their employer NI bill for the tax year.
   

• Should you pay employer NI on every employee? 
  Mostly, yes, but employees under 21, apprentices under 25, and veterans in their first year of civilian employment attract 0% employer NI up to £50,270 a year rather than the standard £5,000 threshold.