How much National Insurance do employers pay in 2026/27?

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Employer National Insurance is a significant cost of employing staff that is entirely separate from the employee's own NI deductions, and understanding it matters for both employers budgeting for staff costs and employees understanding the true cost of their employment. **The 2026/27 rate and threshold** Employers pay 15% Class 1 secondary National Insurance on each employee's earnings above the £5,000 Secondary Threshold (a lower threshold than the employee's own £12,570 Primary Threshold) -- unlike employee NI, there is no upper earnings limit reducing the employer rate at higher pay levels, so the 15% rate continues to apply on all earnings above £5,000, however high. **Why the employer threshold is lower than the employee threshold** The Secondary Threshold (£5,000) is substantially lower than the employee Primary Threshold (£12,570), meaning employers start paying NI on an employee's earnings well before the employee's own NI deductions begin -- this asymmetry has grown following recent policy changes that reduced the employer secondary threshold from its previous level. **Worked example** An employer pays a staff member £30,000 a year. Employer NI is calculated on earnings above the £5,000 threshold: (£30,000 − £5,000) × 15% = £3,750 a year in employer National Insurance -- a cost the employer bears entirely separately from the employee's own tax and NI deductions. **Total cost of employment beyond salary** When budgeting for a new hire, employers should factor in not just the gross salary, but also employer NI (roughly 15% on most of the salary above £5,000), employer pension auto-enrolment contributions (minimum 3% of qualifying earnings), and other costs like sick pay, holiday pay, and any benefits provided -- the true cost of employment is often 20-25% or more above the headline gross salary figure. **Employment Allowance offset** Eligible small employers can reduce their employer NI bill by up to £10,500 a year via the Employment Allowance, which can substantially reduce or even eliminate employer NI liability for very small businesses with modest total payroll. **Class 1A NI on benefits** Beyond regular salary, employers also pay Class 1A National Insurance (at the same 15% rate) on most taxable benefits in kind provided to employees (such as company cars or private medical insurance), reported annually alongside the P11D process. **Why this affects salary negotiations** Understanding employer NI can help contextualise why employers sometimes push back on salary increases even when an individual's productivity clearly justifies it -- a headline salary increase costs the employer that amount PLUS 15% employer NI on the increase (and potentially higher pension contributions too), meaning the true cost to the business is higher than the raw salary figure suggests. **Practical tip** If you run a business, use the National Insurance calculator to model your total employer NI liability across your whole payroll, and check your eligibility for the Employment Allowance each year, since this £10,500 relief can make a meaningful difference to smaller employers' total staffing costs.

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