Question 1

What is the employer NI rate for 2025/26?

Accepted Answer

From 6 April 2025, employer National Insurance is charged at 15% on earnings above the secondary threshold of £5,000 per employee per year. This is up from 13.8% the previous year and the threshold dropped from £9,100 — a double squeeze on employers.

Question 2

What is the secondary threshold for employer NI?

Accepted Answer

The secondary threshold for 2025/26 is £5,000 per employee. You only pay employer NI on the portion of each employee's salary above this amount. For a £30,000 salary that means NI on £25,000 — giving a bill of £3,750 per employee before any Employment Allowance.

Question 3

What is Employment Allowance and how much is it for 2025/26?

Accepted Answer

Employment Allowance lets most eligible employers cut their employer NIC bill by up to £10,500 per year. It increased from £5,000 to £10,500 in April 2025. Claim it through your payroll software — it's applied automatically against each pay-period NI payment until the £10,500 is used up.

Question 4

Who qualifies for Employment Allowance?

Accepted Answer

Most employers qualify, including limited companies, partnerships, sole traders with staff, and charities. You cannot claim if: (a) you are a sole director with no other employees, (b) your employer NI bill was £100,000 or more in the previous tax year, or (c) you are a public authority. Connected companies share one allowance between them.

Question 5

How do I reduce my employer NI bill?

Accepted Answer

Four main levers: 1) Claim Employment Allowance if eligible (worth up to £10,500). 2) Replace salary with employer pension contributions — these are exempt from employer NIC and also reduce corporation tax. 3) For director-shareholders, review the optimal salary level (the directors' NI-free threshold is £9,100 if no EA). 4) Use salary-sacrifice schemes (pensions, electric cars) which reduce the NICable pay figure.

Question 6

Is employer NI tax-deductible?

Accepted Answer

Yes. Employer NIC is a deductible business expense and reduces your corporation tax bill. A company paying £10,000 in employer NIC saves £2,500 in corporation tax (at 25%), so the true net cost is £7,500.

Employer NI Calculator 2025/26

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