Last updated: 16 October 2026
The question
My employees earn an average of £490 a week. How much employer National Insurance will I pay for each of them in 2026/27?
Employer NIC rates for 2026/27
| Item | 2026/27 |
| Employer NIC rate | 15% |
| Secondary threshold | £5,000 a year (£96 a week) |
| Employment allowance | £10,500 a year per business |
| Under-21s and apprentices under 25 | 0% up to £50,270 a year (£967 a week) |
| Class 1A on benefits in kind | 15% |
These rates took effect in April 2025 and remain the same for 2026/27.
The answer
For an employee earning £490 a week, employer NIC is (£490 − £96) × 15% = £59.10 a week, or about £3,073 a year. Before April 2025, the same employee cost £43.47 a week (at 13.8% above £175), so the cost rose by around £810 a year.
Examples at different salaries
| Annual salary | Employer NIC 2026/27 |
| £12,570 | £1,136 |
| £25,000 | £3,000 |
| £30,000 | £3,750 |
| £50,000 | £6,750 |
| £80,000 | £11,250 |
Figures are annual, before the employment allowance.
The employment allowance
Most employers can deduct up to £10,500 a year from their employer NIC bill. This covers the cost of employing about three people on £25,000. It is not available to a company whose only employee is a director, or for staff working only on personal, household tasks such as nannies.
Worked example
A café employs six staff on £490 a week each. Employer NIC is £3,073 per person, £18,438 in total. After the £10,500 employment allowance, the café pays £7,938 a year. If two of the staff are under 21 and earn below £50,270, there is no employer NIC on their pay at all, and the café’s bill falls to £1,792 after the allowance.
Other employment costs to budget for
- Auto-enrolment pension contributions: at least 3% of qualifying earnings
- Statutory Sick Pay from the first day of sickness
- Holiday pay and statutory family pay
- The apprenticeship levy if your pay bill exceeds £3 million
Ways to manage the cost
Salary sacrifice for pensions can reduce employer NIC, although the NIC saving is due to be capped at £2,000 per employee from April 2029. Check you claim the under-21 and apprentice reliefs, and veterans relief, where available.
Directors and employer NIC
Directors have an annual earnings period for NIC, so the £5,000 threshold applies to their total pay for the year rather than week by week. Many single-director companies cannot claim the employment allowance, so a salary of £5,000 or less avoids employer NIC altogether, although a salary at the £12,570 personal allowance may still be worthwhile because the company gets corporation tax relief on both the salary and the NIC.
Paying and reporting employer NIC
Employer NIC is reported on each Full Payment Submission and paid to HMRC by the 22nd of the following month if you pay electronically. Small employers expecting to pay less than £1,500 a month can pay quarterly. Late payment can lead to penalties and interest, so build the cost into your monthly cash flow.
Frequently asked questions
Is employer NIC deductible for corporation tax?
Yes, it is an allowable business expense.
Do directors pay employer NIC on their salary?
Yes, the company pays employer NIC above £5,000.
How do I claim employment allowance?
Through your payroll software on the Employer Payment Summary.
Do I pay employer NIC on expenses?
Not on genuine business expenses reimbursed at cost.
Related: what employer NI changes new businesses should prepare for, NIC relief for employing veterans and what National Insurance is.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with payroll and employer NIC. See our payroll services service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 16 October 2026. It is not personal advice, so speak to an accountant about your own situation.
