Employer NIC Calculator, 2026/27

How this is calculated

Employer NIC is charged at 15.0% on all earnings above the secondary threshold of £5,000, a threshold that was cut sharply from the previous £9,100 level, which is why employer NIC bills rose noticeably for many small employers. There is no upper limit, unlike employee NIC, so the 15% rate keeps applying to the whole of a salary above the threshold.

Where a company qualifies, the employment allowance reduces the employer NIC bill by up to £10,500 a year, applied against the total employer NIC liability across all employees, not per employee. This calculator applies it against the combined liability for the number of employees entered at the given salary.

A single-director company with no other employees generally cannot claim the employment allowance, because at least one other employee, or the director being paid above the secondary threshold alongside other staff, is normally required, so many one-person companies set salary at or below the threshold to avoid an NIC bill they cannot offset.

Why the secondary threshold matters for salary decisions

Because the secondary threshold sits well below the employee primary threshold, salaries between the two, roughly £5,000 and £12,570, attract employer NIC but no employee NIC, which is an important nuance often missed when directors assume a salary "up to the NIC threshold" is entirely NIC-free.

This is one reason many single-director companies without the employment allowance choose a salary at or just below the secondary threshold, avoiding employer NIC altogether while still building a qualifying year for state pension, if the salary clears the lower earnings limit.

Combining employer NIC with other payroll costs

Employer NIC sits alongside employer pension contributions and, for larger payrolls, the apprenticeship levy at 0.5% above a £15,000 allowance, when working out the true cost of employing someone. A headline salary understates the total cost to the business once these are added.

Reviewing employer NIC costs annually, alongside whether the employment allowance still applies, is worth doing whenever headcount or salary levels change, since eligibility and the allowance amount can shift the calculation materially.

What is the employer NIC rate for 2026/27?

15% on salary above the secondary threshold of £5,000 a year, with no upper limit on the earnings this applies to.

Can a single-director company claim the employment allowance?

Generally not, if the director is the only employee paid above the secondary threshold. The allowance is usually restricted to employers with at least one other qualifying employee.

Is employer NIC the same as employee NIC?

No, they are separate charges. Employee NIC is deducted from the employee's pay; employer NIC is an additional cost borne entirely by the employer and never deducted from the employee's salary.

How much is the employment allowance worth in 2026/27?

Up to £10,500 a year, offset against the employer's total Class 1 NIC liability, for qualifying employers.