Employer National Insurance at 15%: how it works

Employers pay secondary Class 1 National Insurance at 15% on each employee’s earnings above the secondary threshold, which for 2026 to 2027 is £96 a week, £417 a month or £5,000 a year. Unlike the employee charge there is no upper limit and no lower rate, so every pound above the threshold costs 15% unless a zero rate category or the Employment Allowance applies.

Tax investigation insurance from £108.75 a year (£9.06 a month).Pays up to £100,000 of your accountant's fees if HMRC opens an enquiry. No excess. Buy online in a few minutes.

See my price in 2 questions How the cover works Accountant? Offer cover to your clients or call 01795 841 310

Where do the 15% rate and £5,000 threshold come from?

Section 9 of the Social Security Contributions and Benefits Act 1992 sets the secondary contribution as the relevant percentage of earnings paid in the period that exceed the current secondary threshold, and section 9(2) fixes the secondary percentage at 15%. Section 6(1)(b) makes the contribution payable whenever earnings in the period exceed the secondary threshold or its prescribed equivalent for the pay interval.

HMRC’s rates and thresholds for employers 2026 to 2027 give the secondary threshold (ST) as:

Pay period	Secondary threshold
Weekly	£96
Monthly	£417
Yearly	£5,000

The same 15% figure is used for Class 1A on benefits in kind and on termination awards above £30,000, and for Class 1B on items in a PAYE Settlement Agreement.

How is employer National Insurance worked out on each payment?

The employer’s charge follows the same earnings period as the employee’s: the pay interval for most staff, the tax year for directors. For each payment:

Take the gross pay that counts as earnings for National Insurance in that earnings period.
Subtract the secondary threshold for that period (£96 weekly, £417 monthly, or the scaled equivalent).
Multiply what is left by 15%. If the result is negative, nothing is due.

Regulation 12(1) of the Social Security (Contributions) Regulations 2001 requires employer and employee contributions to be calculated separately and each rounded to the nearest penny (NIM11002). For irregular pay intervals CWG2 says the annual ST is divided by 365 and multiplied by the days the payment covers.

Illustration only. A category A employee is paid £3,000 a month in 2026 to 2027.

Step	Employer	Employee
Monthly pay	£3,000	£3,000
Threshold	£417 (ST)	£1,048 (PT)
Earnings above threshold	£2,583	£1,952
Rate	15%	8%
Contribution	£387.45	£156.16

Over twelve months the employer pays £4,649.40. A straight annual calculation, 15% of (£36,000 minus £5,000), gives £4,650. The 60p gap comes from the rounded monthly threshold: £417 x 12 is £5,004.

Worried about an HMRC check? Tax investigation insurance pays your accountant’s fees if HMRC opens an enquiry or compliance check. Solar Protect cover pays up to £100,000 with no excess. It never pays tax, interest or penalties.

From £108.75 a year (£9.06 a month) for individuals, £117.57 for sole traders and £207.50 for companies and partnerships, including IPT and the £20 admin fee.

See my price in 2 questions or call 01795 841 310.

★★★★★ Rated 4.9 out of 5 on Trustpilot from over 160 reviews

Why does the employer pay when the employee pays nothing?

The secondary threshold (£5,000 a year) is far below the employee’s primary threshold (£12,570 a year), so employer contributions start much lower down the pay scale. A part time employee on £1,000 a month pays no employee National Insurance, but the employer pays 15% of £583, which is £87.45 each month.

The employer also keeps paying when the employee stops. Section 6(3) of the 1992 Act removes the employee’s primary liability after State Pension age “without prejudice to any liability to pay secondary Class 1 contributions”, and HMRC’s table shows category C at nil for the employee but 15% for the employer. The same is true above the upper earnings limit: the employee drops to 2%, but the employer rate stays at 15% on the balance. HMRC’s National Insurance Manual at NIM37010 confirms there is no annual limit for employer contributions.

When is the employer rate zero?

Some category letters replace the 15% with 0% up to an upper secondary threshold. For 2026 to 2027 HMRC’s table shows:

Group	Letters	0% up to
Employees under 21	M, Z	£967 a week, £4,189 a month, £50,270 a year
Apprentices under 25	H	£967 a week, £4,189 a month, £50,270 a year
Qualifying veterans	V	£967 a week, £4,189 a month, £50,270 a year
Freeport and Investment Zone employees	F, I, L, S, N, D, E, K	£481 a week, £2,083 a month, £25,000 a year

Above those thresholds the normal 15% applies. The conditions, evidence and time limits for each relief are covered in employer NI reliefs, and the letters themselves in National Insurance category letters.

How does the Employment Allowance reduce the bill?

Eligible employers can reduce their annual employer Class 1 liability by up to £10,500 for 2026 to 2027. GOV.UK explains that the allowance is used up each time payroll is run until the £10,500 has gone or the tax year ends, and it is claimed by setting the Employment Allowance indicator on an Employer Payment Summary. It only offsets secondary Class 1, not Class 1A or 1B. Several groups cannot claim, including a company whose only employee paid above the secondary threshold is its sole director, and only one company in a connected group may claim. Full details are in the Employment Allowance explained.

Can the employer pass the cost on to the employee?

Generally not. Paragraph 3A(1) of Schedule 1 to the 1992 Act stops anyone liable for secondary Class 1, Class 1A or Class 1B contributions from deducting them from pay, recovering them from the earner in any other way, or making an agreement to do so. The exception in paragraph 3A(2) allows an agreement for the employee to bear secondary Class 1 on “relevant employment income”, which is the share scheme situation.

The employee’s own contribution is a different matter. Paragraph 3(1) makes the employer liable in the first instance to pay the employee’s primary contribution as well, and paragraph 3(3) allows it to recover that amount only by deduction from the employee’s earnings. Contributions not deducted at the right time cannot simply be clawed back later in cash.

When is employer National Insurance paid?

Employer and employee Class 1 contributions are paid with the PAYE bill. GOV.UK says payment is due by the 22nd of the next tax month for monthly payers, or by the 22nd after the end of the quarter for quarterly payers, with cheques by post needing to reach HMRC by the 19th. Interest and penalties can apply to late payment. See when to pay PAYE to HMRC.

Class 1A on benefits in kind runs on a different annual timetable; see Class 1A National Insurance.

What mistakes come up most often?

Applying the employee’s £12,570 threshold to the employer calculation, which understates the employer bill on every employee earning over £5,000.
Assuming employer contributions stop at State Pension age or at the upper earnings limit.
Leaving an under 21 or apprentice on letter A, losing the zero rate.
Claiming the Employment Allowance for a one director company with no other employee paid above the secondary threshold.
Agreeing that an employee will reimburse the employer’s contributions outside a permitted share scheme election.

For the employee side of the same calculation, see employee National Insurance rates for 2026 to 2027.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

Related Accountapedia entries

Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.