How much National Insurance do I pay as an employer?

This guide focuses on how much NICs employers must pay on behalf of your employees. Our guide provides more information on National Insurance individuals pay. 

How do I calculate my employees’ NICs? 

All employees have a National Insurance category letter which you should use when submitting payslips and processing your payroll. This helps you to calculate how much you must contribute for each employee. Most employees fall into category A. However, there are additional categories depending on employees' individual situation, including:  

• Category B 
  Married working women and widows entitled to pay reduced NICs (born before 1961). 
• Category C
  Employees over the current State Pension age (which is between 60 and 68 years old, depending on date of birth).  
• Category H 
  Apprentices under the age of 25. 
• Category J 
  Employere allowed to defer NICs because they are paying it through another job. 
• Category M 
• Employees under the age of 21. 
• Category V
  Employees who are working in their first job since leaving the armed forces (veterans). 
• Category Z 
  Employees under the age of 21 who can defer NICs because they are paying it through another job. 

What are my National Insurance duties as an employer?

As an employer, you must deduct employees’ NICs (also called Primary Class 1 contributions) from their earnings and pay this to HMRC.

In addition, employers must pay employers NICs (known as Secondary Class 1 contributions) on their employees’ earnings. 

Employers pay primary and secondary contributions to HMRC along with the monthly PAYE tax payments each month. You must keep a record of the contributions deducted from each employee and file year end returns for each of them (form P60 to employees and Final Full Payment Submission and Employer Payment Summary to HMRC).  

Payroll software will provide you with different reports for you to show this information. Form P32 is the employer payment record and summarises the amounts you must pay to HMRC each month, including PAYE and NICs. 

Even if an employee is not paying NICs, it is still important to send information to HMRC. This ensures the employees NICs record is updated with credits. Without these credits, the employee may not be eligible for a full state pension or contributory benefits.

Employers must provide employees with a P60 showing the NICs payable by them each year by 31st May. 

Class 1A contributions 

Employers must also pay Class 1A NICs on most taxable benefits and expenses. You must include details of these benefits and the Class 1A NICs paid on Form P11D(b) and submit them by 6th July following the end of the tax year. You must provide each employee with a P11D showing them the value of the benefits they received, which they will need in order to pay income tax on those benefits.

Class 1B contributions 

If you have a PAYE Settlement Agreement (PSA) in place for your employees, you must pay Class 1B contributions on the amounts included. These contributions are different from Class 1 or Class 1A contributions. PSAs cover small, irregular or one-off benefits, on which employers pay the tax and NICs on behalf of their employees in one annual sum. 

Class 1B contributions are payable to HMRC by 22nd October following the end of the tax year. You’ll need to pay contributions by 19th October if you’re paying by post.  

What are the National Insurance thresholds? 

There are nine thresholds for paying Class 1 NICs relevant to employers and employees for the 2026/27 tax year. Employers pay NICs on earnings above the secondary threshold, except for under 21s, apprentices, veterans and employees in freeports and investment zones.  

Class 1 NIC thresholds	Monthly	Weekly
Lower Earnings Limit	£559	£129
Primary Threshold	£1,048	£242
Secondary Threshold	£417	£96
Upper Earnings Limit	£4,189	£967
Upper Secondary Threshold	£4,189	£967
Apprentice Upper Secondary Threshold	£4,189	£967
Freeports Upper Secondary Threshold	£2,083	£481
Investment Zones Upper Secondary Threshold	£2,083	£481
Veterans Upper Secondary Threshold	£4,189	£967

How much NICs does an employer pay? 

How much an employer pays in Class 1 NICs depends on their employees’ salary and their NI category letter: 

Income (monthly)	Class 1 secondary rate
Above £417	15%

All employees under the age of 21 and apprentices under the age of 21, apprentices and veterans are exempt from employer Class 1 NICs, unless they earn £4,189.01 a month or higher. In freeports and investment zones, you won’t pay employers’ NICs until your employees earn £2,083.01 or more per month. The employee will pay employee class 1 NICs though, so there may still be an amount to pay to HMRC. This is a benefit to the employer only. 

What is the Employment Allowance and can I claim it?

Employers can use the Employment Allowance to lower their NICs bill by up to £10,500 per year. You can claim the Employment Allowance if your organisation is not a:

• public body, 
• business doing 50% or more of its work for the public sector, or 
• single director-employee company. 

The allowance is given as a credit against contributions payable and can be claimed on the Employer Payment Summary (EPS). If you're preparing your own payroll you'll need to mark the employment allowance indicator field when sending an EPS. If there is no appropriate field in your software you can use HMRC's PAYE tools. 

What if my business is in a UK Freeport or Investment Zone?  

UK Freeports and Investment Zones (and Green Freeports in Scotland) are specific areas in the UK with tax incentives for businesses. Eligible employers within a Freeport or Investment Zone site can apply a 0% rate of employers’ class 1 NICs to the earnings of new employees up to £25,000 for 36 months. There are restrictions in place relating to working time and location, employment start dates and previous employment, so speak to your payroll adviser to ensure those conditions are met before applying NICs at these special rates.   

Employer NICs changes from April 2025

A key change announced in the Autumn 2024 Budget was an increase in the rate of NICs paid by employers.  

Before April 2025, employers’ NICs was applied at a rate of 13.8% on wages over £9,100. However, from April 2025, employers’ NICs increased by 1.2% to 15%.  

In addition, the threshold where employer contributions become payable fell from £9,100 to £5,000. The threshold will remain at £5,000 until 5th April 2028.  

Need help with National Insurance?

If you are employing staff for the first time we can work with you alongside our partners to help you navigate employment taxes and employment law to ensure you are doing everything by the book.  

If you require clarification on your National Insurance situation from a qualified and trustworthy professional, we will be happy to help with your bookkeeping or payroll. 

For a free initial consultation, call our friendly and experienced team today on 0203 827 6000 or use our online enquiry form. 

Last updated: 23rd April 2026