Employer NI & Class 1 NICs Calculator 2026/27

Employer Class 1 National Insurance Calculator

✓ Verified for 2026/27

Payroll & Employee Details

£
Apply Employment Allowance?
Employer NI Due
£4,908
after allowance
Total NI Before Allowance
£9,908
at 13.8% rate
Allowance Saved
£5,000
from £5,000 cap
Total Payroll Cost
£94,908
salaries + net NI

Employer NI Breakdown

Total Gross Salaries £90,000
Employer NI (Net) £4,908
Allowance Used £5,000
Total Cost to Employer £94,908
Salaries 90%
NI Paid 5%
Saved 5%
ℹ️ Employer National Insurance is calculated at 13.8% on earnings above the Secondary Threshold of £9,100 per employee per year. Eligible employers can claim the £5,000 Employment Allowance to offset their Class 1 NI liability.
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Verified for Accuracy (2026/27 Tax Year)
Fact-checked and audited by David Vance, CTA FCA, Chartered Tax Advisor & Accountant. Verified against official HMRC rules.

How We Calculated This

  1. Input variables: Enter the relevant amounts, rates, or percentages in the form.
  2. Real-time breakdown: The calculator applies HMRC rules and thresholds for the 2026/27 tax year to process the values.
  3. Display outputs: The visual graphs, donut charts, and tables are compiled dynamically to show your net take-home and deductions.

Real-World Examples

Standard Scenario

A basic calculation applying standard UK tax bands and allowances.

Calculation runs based on standard HMRC rules.
With Pension or Deductions

Factoring in a percentage of salary sacrifice or pension contributions.

Deductions are calculated and adjusted accordingly.

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Frequently Asked Questions & Detailed Tax Guide

What is Employer National Insurance and how is it calculated?

Employer National Insurance (secondary Class 1 contributions) is a payroll tax paid by UK employers on the earnings of their employees. For the 2026/27 tax year, the standard Employer National Insurance rate is **13.8%** on all earnings above the Secondary Threshold, which is set at **£9,100 per year** (or £175 per week). Unlike employees, who stop paying standard National Insurance rates once they exceed the Upper Earnings Limit, employers pay the flat 13.8% rate on all earnings with no upper limit. This makes employer NICs one of the largest tax overheads for UK businesses hiring staff.

What is the Employment Allowance?

The Employment Allowance is a government scheme that allows eligible businesses to reduce their annual Employer National Insurance liability by up to **£5,000** per tax year. It is designed to encourage small businesses to hire staff.
– **Eligibility:** You can claim it if your total Employer Class 1 National Insurance liabilities in the previous tax year were under £100,000.
– **Exclusion:** You cannot claim the allowance if you are a single-director company where the director is the only employee paid above the Secondary Threshold.

Step-by-Step Mathematical Calculation: Employer NI

Let’s calculate the Employer National Insurance due for an employee with a gross salary of £40,000 for the 2026/27 tax year:

  • 1. Gross Salary: £40,000
  • 2. Secondary Threshold: £9,100
  • 3. Earnings subject to Employer NI: £40,000 – £9,100 = £30,900.
  • 4. Calculate NI at 13.8%: £30,900 * 13.8% = **£4,264.20 Employer NI due**.
  • 5. Total employment cost before pension: £40,000 salary + £4,264.20 NI = £44,264.20.
  • Impact of the Employment Allowance: If the business is eligible and has not used up its allowance, the £4,264.20 is fully offset, bringing the actual Employer NI payable for this employee to **£0**.

Tax Expert Pro-Tips: Salary Sacrifice Savings

David Vance, CTA FCA, recommends: “Employers can save thousands of pounds in National Insurance by implementing a salary sacrifice pension scheme. When an employee sacrifices a portion of their gross salary in exchange for an employer pension contribution, the salary is never paid as cash, so no Employer NI (13.8%) is due on that portion. Many employers pass back a portion of these NI savings to the employee’s pension pot as a bonus incentive, creating a win-win scenario.”

Legislative References

  • Social Security Contributions and Benefits Act 1992 – Statutory framework for Class 1 contributions.
  • HMRC National Insurance Manual (NIM01000) – Secondary contributor liability rules.