by Asim Abbas
11 November 2026 
Employer National Insurance and the Employment Allowance in 2026/27
Employer National Insurance and the Employment Allowance in 2026/27
Employer National Insurance rose to 15% in April 2025 and the threshold where it starts fell to £5,000. For small employers, that’s one of the biggest cost changes in years.
- Employer NI is 15% on earnings above £5,000 a year
- The Employment Allowance knocks up to £10,500 off
- Single-director companies can’t claim the allowance
- Salary sacrifice can reduce NI for both you and staff
The Employment Allowance was raised to £10,500 at the same time, which cancels out the bill for many small businesses.
This guide explains how employer National Insurance works in 2026/27, who can claim the Employment Allowance and how to keep costs down.
Employer NI rates for 2026/27
| Item | 2026/27 |
|---|---|
| Secondary threshold | £5,000 a year (£96 a week) |
| Employer rate | 15% |
| Employment Allowance | Up to £10,500 a year |
| Under-21s and apprentices under 25 | 0% up to £50,270 |
You employ four staff on £25,000 each. Employer NI is 15% × (£25,000 − £5,000) × 4 = £12,000. After the £10,500 Employment Allowance, you pay just £1,500 for the year.
National Insurance calculator
Employer and employee NI for 2026/27.
Who can claim the Employment Allowance?
- Most businesses and charities with employer NI to pay
- Companies with at least one employee or director paid above the secondary threshold who isn’t the sole director
You can’t claim it if your company’s only employee paid above £5,000 is a director, or if you’re a public body or provide services mainly for a public body. Connected companies can claim only once between them. Claim it through your payroll software.
Two-director companies
If two directors are both paid above £5,000, the company can usually claim. That can make a higher salary for both directors more tax-efficient than in a one-director company.
Fixed-fee accountancy support
Transparent monthly packages for sole traders, landlords and limited companies. Fixed fees agreed upfront, VAT included.
Get a fixed-fee quoteCall 0161 531 4179Ways to manage employer NI
- Salary sacrifice pensions: sacrificed pay is free of employer and employee NI. From April 2029, NI relief is due to be capped at £2,000 a year per employee
- Under-21s and apprentices: no employer NI up to £50,270
- Tax-free benefits: such as cycle-to-work and workplace pension contributions
- Director pay planning: see our guide to salary vs dividends
HMRC’s Employment Allowance rules are on GOV.UK. Our payroll services claim the allowance and keep you compliant, and our National Insurance calculator shows the cost of any salary.
What should I do next?
Many small employers miss it.
It saves NI for both sides.
Under-21s and apprentices.
Frequently Asked Questions
What is the employer National Insurance rate for 2026/27?
15% on employee earnings above £5,000 a year.
How much is the Employment Allowance?
Up to £10,500 a year off your employer National Insurance bill.
Can a one-director company claim the Employment Allowance?
No. If the only employee paid above the threshold is a director, the company can’t claim.
Do I pay employer NI for under-21s?
Not on earnings up to £50,270 a year. The same applies to apprentices under 25.
Does salary sacrifice still save National Insurance?
Yes, for now. From April 2029, the NI saving on pension salary sacrifice is due to be capped at £2,000 a year per employee.
Need help with this? Wingate Accountants offers fixed-fee online accountancy support across the UK. Call 0161 531 4179 or request a quote at wingateaccountants.co.uk.
About the Author
Stephen Reynold
I’m Stephen Reynold, an accountant at Wingate Accountants. I work with sole traders and small companies, turning tax rules into clear, practical next steps.
