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

From 6 April 2025 the employer Class 1 secondary NIC rate is 15% on earnings above the £5,000 secondary threshold per employee, per year.

What is the Employment Allowance?

Eligible employers can reduce their annual employer's Class 1 NIC bill by up to £10,500 in 2025/26. Sole-director companies with no other employees, and public-sector employers, are excluded.

What is the true cost of employing someone in the UK?

As a rule of thumb, the fully-loaded cost of a UK employee is roughly 15–20% above gross salary once employer's NIC (15% above £5,000), the 3% pension auto-enrolment minimum on qualifying earnings and any Apprenticeship Levy exposure are included.

When does the Apprenticeship Levy apply?

Employers with an annual pay bill above £3 million pay a 0.5% Apprenticeship Levy, offset by a £15,000 annual allowance.

Tools

UK Payroll On-Cost Calculator

Model the true cost of employment in the UK for the 2025/26 tax year. Enter gross salary, headcount, employer's NIC assumptions and any additional allowances — we'll show employer's National Insurance (after Employment Allowance), workplace pension, the Apprenticeship Levy and total employer cost per employee.

Gross salary (£/year)Headcount

Employer NIC assumptions

Secondary NIC rate (%)Secondary threshold (£)

Claim Employment Allowance (up to £10,500). Not available to sole-director companies with no other employees.Apply Apprenticeship Levy (0.5% of pay bill over £3M, £15k allowance).

Pension & other on-costsEmployer pension contribution (% of qualifying earnings £6,240–£50,270)

Other on-costs (% of gross)Fixed benefits (£/employee/yr)

Use these fields for private medical, life cover, PHI, training budgets, or a blended bonus provision.

Total employer cost

£250,314

per year · £50,063 per employee · on-cost 11.3% of gross

Gross pay bill: £225,000
Employer NIC (gross): £30,000
Less: Employment Allowance: −£10,500
Employer NIC (net): £19,500
Workplace pension (3%): £5,814
Total on-costs: £25,314

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Disclaimer. Estimate only, based on 2025/26 UK rates. Ignores directors' alternative NIC method, Employer NIC relief for veterans / Freeport / Investment Zone employees, salary sacrifice, benefits in kind (Class 1A NIC), Statutory Maternity/Paternity reclaim and Scottish/Welsh income tax variations. Not tax advice.

Your UK payroll on-cost, explained

For 5 UK employees on a gross salary of £45,000, the total annual pay bill is £225,000. Employer's Class 1 secondary National Insurance at 15% above the £5,000 secondary threshold produces £30,000 in gross NIC, reduced by the £10,500 Employment Allowance to £19,500. Auto-enrolment pension at 3% of qualifying earnings adds £5,814. The fully-loaded cost of employment is £250,314 — an on-cost of 11.3% on top of gross salary.

UK employer payroll quick reference (2025/26)

• Employer NIC rate: 15% on earnings above the £5,000 secondary threshold (from 6 April 2025).
• Employment Allowance: up to £10,500 relief against employer NIC per PAYE scheme.
• Auto-enrolment minimums: 3% employer + 5% employee on qualifying earnings £6,240–£50,270.
• Apprenticeship Levy: 0.5% of annual pay bill above £3 million (£15,000 allowance).
• RTI filing: submit an FPS on or before each payday; EPS monthly where applicable.
• PAYE/NIC payment deadline: 22nd of the following month (electronic) or 19th (post).
• Class 1A NIC on benefits: 15% on P11D-reported benefits, payable by 22 July.

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