Employer National Insurance rates 2025/26: what you pay and what changed

The headline numbers

For the 2025/26 tax year, employer Class 1 National Insurance works like this:

• Rate: 15% on each employee's earnings above the secondary threshold.
• Secondary threshold: £5,000 per year (about £96 per week) — down from £9,100.
• Employment Allowance: up to £10,500 per year off the total bill for eligible employers, with the old £100,000 eligibility cap removed.

What the change means in practice

The lower threshold pulls far more of every wage into employer NIC, so most businesses' bills rose — which is precisely why the reliefs matter more than they used to. An employer who claims nothing pays the full 15%; an employer using the Employment Allowance and the right category letters can pay dramatically less for the same team.

Category letters that reduce the rate to 0%

Employer NIC drops to 0% up to an upper threshold for several groups — if the employee is on the correct NI category letter:

• Under-21s (category M).
• Apprentices under 25 (category H).
• Veterans in their first year of civilian employment (category V).
• Employees at Freeport and Investment Zone sites (special categories).

Getting the number down, legally

Between the Employment Allowance, category letter corrections, statutory pay reclaims and pension structuring, the gap between a payroll run on defaults and a payroll run properly optimised is substantial. A free payroll review prices that gap for your business — using your real numbers, before you commit to anything.

What is the employer National Insurance rate for 2025/26?

15% on earnings above the secondary threshold of £5,000 per year. Employees don't pay this — it's a cost on the employer.

How much is the Employment Allowance in 2025/26?

Up to £10,500 per tax year for eligible employers, and the previous £100,000 NIC-bill eligibility cap has been removed — so far more businesses qualify than before.

Do employers pay National Insurance for apprentices and under-21s?

Not up to an upper earnings threshold — provided the employee is on the correct NI category letter (H for apprentices under 25, M for under-21s). Wrong letters are one of the most common payroll errors.