UK National Insurance Rates 2026/27, 2025/26: Employer & Employee

Key Takeaways

• Employers pay 15% Class 1 National Insurance (NI) on earnings above the Secondary Threshold, which is £5,000 a year in British pounds (GBP). Employees pay 8% between the £12,570 Primary Threshold and the £50,270 Upper Earnings Limit, then 2% above that. None of these figures changed between 2025/26 and 2026/27.
• One Class 1 threshold did move for 2026/27. The Lower Earnings Limit (LEL) rose from £6,500 to £6,708 a year, or £125 to £129 a week. That is the point at which an employee starts building entitlement to contributory benefits, not the point at which either side starts paying.
• The April 2025 headline was a 1.2 percentage point rate rise, but on a £35,000 salary, the threshold cut did most of the damage. The Secondary Threshold fell from £9,100 to £5,000 on April 6, 2025, so the employer bill on that salary went from £3,574.20 to £4,500.00. A rate-only comparison would have told you £420.
• Employment Allowance is £10,500 in both years, and the old £100,000 eligibility cap is gone. Eligible employers set it against their secondary Class 1 bill, where it covers the first £10,500.
• Other payroll rules did change in April 2026. The National Living Wage for workers aged 21 and over rose to £12.71 an hour on April 1, 2026. From April 6, 2026, Statutory Sick Pay is due from the first full day of sickness, and reimbursed eye tests for screen users, home working equipment used for the job, and flu vaccinations became free of income tax and National Insurance, each subject to conditions set out below.

Employers pay 15% Class 1 secondary National Insurance on everything an employee earns above £5,000 a year. Employees pay 8% between £12,570 and £50,270, then 2% above that. Those figures are the same in the 2026/27 tax year as they were in 2025/26. The employer figures have applied since April 6, 2025, and the employee 8% rate since April 6, 2024.

Updated: September 2026

We keep both tax years on this page on purpose. Payroll corrections and benefit-in-kind filings do not stop on April 5, so the year you need is as often last year's as this one's.

UK National Insurance Rates and Thresholds: 2026/27 and 2025/26

Every figure in this table is published by HM Revenue and Customs (HMRC). The 2026/27 column comes from Rates and thresholds for employers 2026 to 2027, published January 30, 2026, and last updated September 1, 2026. The 2025/26 column comes from Rates and thresholds for employers 2025 to 2026, published January 31, 2025, and last updated March 1, 2026.

The Zero-Rate Thresholds, and What the Category Letters Mean

Employer National Insurance is not 15% for everyone. For 2026/27, HMRC sets an Upper Secondary Threshold of £50,270 a year (£4,189 a month, £967 a week) for employees under 21, apprentices under 25, and armed forces veterans in their first year of civilian employment. Below that threshold, the employer rate is 0%, and above it, the normal 15% applies. For each eligible employee working in a Freeport or Investment Zone special tax site, employers have a separate Upper Secondary Threshold of £25,000 a year (£2,083 a month, £481 a week). All four figures are in the 2026 to 2027 employer guidance.

The category letter on a payslip is what tells payroll which of those thresholds applies. Category A is the standard letter and covers most employees: 0% below the Primary Threshold, 8% up to the Upper Earnings Limit, and 2% above it on the employee side, with 15% above the Secondary Threshold on yours. Category M is the same set of employee rates for workers under 21, but it uses the zero-rate Upper Secondary Threshold on the employer side. The other letters, from B through Z, cover married women with a reduced-rate election, deferment cases, veterans, Freeport and Investment Zone employees, and a handful of other cases. HMRC publishes the full letter-by-letter table in the same guidance.

1. What Are National Insurance Contributions (NICs)?

National Insurance Contributions (NICs) are mandatory payroll taxes that fund the UK’s welfare system. The NICs support public services like the state pension, the National Health Service (NHS), unemployment benefits, and parental leave.

Who Pays NICs and What Are the Classes?

Both employees, employers, and self-employed individuals are required to contribute to the NICs system. Contributions vary depending on the employment status, and they are classified by different NIC categories:

• Class 1 (Employee): Paid by employees through deductions from their salary on earnings above the Primary Threshold.
  
  
• Class 1 (Employer): Paid by employers on top of wages paid, for earnings above the Secondary Threshold.
  
  
• Class 2 and Class 4 (Self-employed):
  • Class 2 no longer has to be paid. With profits of £7,105 or more a year in 2026/27, it is treated as paid, which protects the person's National Insurance record. Below £7,105, it is voluntary, at £3.65 a week.
  • Class 4 is a percentage of annual profits, paid once earnings exceed a specified amount.

(Photo by Pixabay on Pexels ) 

To explore the full list of NICs thresholds, rates, and additional classifications, visit the official GOV.UK website for the latest updates. We also have a complete guide for UK employment to help you get started on what needs to be done before making a first hire in the UK. 

Why NICs Matter to Employers

For employers, NICs are a recurring cost on the part of each salary above the Secondary Threshold, so any change to the rate or the threshold feeds straight into budgets and staffing decisions. 

NICs vs Income Tax and International Comparisons

NICs are different from income tax because they fund specific benefits like pensions and healthcare, rather than going into the UK's general budget. Many other countries have similar systems, like Social Security contributions in the United States, but the structure, rates, and thresholds vary widely. For more information on hiring in the UK, see our UK employment guide. 

2. What Changed on April 6, 2025, and What Changed in April 2026

The changes that took effect on April 6, 2025, are still the baseline for companies running UK payroll today. The UK government made four adjustments:

• The Class 1 secondary NICs rate (your main employer contribution) increased from 13.8% to 15%.

• The Secondary Threshold was lowered from £9,100 to £5,000 per year.

• The Employment Allowance was raised from £5,000 to £10,500.

• The £100,000 eligibility cap for the Employment Allowance was completely removed.

These adjustments align with the UK’s Autumn Budget 2024, focusing on boosting national revenue and providing targeted relief for smaller enterprises. 

The lower threshold also means a larger portion of employee earnings is now subject to employer NICs.

What Changed in the 2026/2027 Tax Year

The 15% employer rate and the £5,000 Secondary Threshold both carried over into 2026/27 unchanged. Several other rules that land on payroll did change in April 2026:

• National Living Wage increase: On April 1, 2026, the minimum wage for workers aged 21 and over rose to £12.71 per hour, a rise of 50p. The 18 to 20 rate rose to £10.85, and the 16 to 17 and apprentice rates both rose to £8.00. Higher gross pay means a higher 15% on top of it.
  
  
• Lower Earnings Limit adjustment: On April 6, 2026, the LEL rose to £6,708 per year (£129 per week), which slightly changes the point at which employees build entitlement to contributory benefits. It does not change what either side pays.
  
  
• Statutory Sick Pay reform: From April 6, 2026, Statutory Sick Pay is payable from the first full day of sickness absence to all eligible employees, whatever they earn, at £123.25 a week or 80% of average weekly earnings, whichever is lower.
  
  
• New exemptions for reimbursements: From April 6, 2026, three kinds of reimbursement are free of income tax and National Insurance, each on its own conditions. Eye tests and special corrective appliances qualify for staff who use display screen equipment, where health and safety regulations require you to provide them and you make them available to all of those staff. Home working equipment qualifies where its sole purpose is to let the employee do the job and any private use is not significant. Flu vaccinations are now exempt whether you reimburse the cost or provide the vaccination directly, provided neither is made under a salary sacrifice arrangement. If you plan to offer any of the three through salary sacrifice, check the treatment first, because the general rules on salary sacrifice can remove an exemption.
  
  
• Umbrella company rules: From April 6, 2026, where an umbrella company employs workers supplied to your business, the agency that contracts with you is responsible for making sure Pay As You Earn (PAYE) is operated correctly, or you are if no agency is involved. HMRC can recover any underpayment from the agency or, where there is none, from you.

3. What the 15% Rate Costs You per Employee

At first glance, the rate rise from 13.8% to 15% looks like 1.2 percentage points. That is not what it cost, because the Secondary Threshold fell from £9,100 to £5,000 at the same time, which brought an extra £4,100 of pay into charge on any salary of £9,100 or more. A rate-only comparison understates the real increase by roughly half.

The table below shows the employer-side figure for a whole year of employment on category A, before Employment Allowance. The second column is the current calculation, 15% of everything above £5,000. The third column is what the same salary would have cost under the rules that applied up to April 5, 2025, 13.8% of everything above £9,100, and the last column is the difference.

Read across the £35,000 and £70,000 rows before you plan a headcount. A ten-person team on £35,000 costs £9,258 more a year than the same team cost before April 6, 2025. A single £70,000 hire costs £1,345.80 more. Employment Allowance, if you are eligible, covers the first £10,500 of your total secondary bill, so a small employer may absorb most of that and a larger one will not.

4. Implications for Your Business

Employers need to consider how higher employer NI rates and shifting thresholds affect different parts of their business. The effects show up in budgeting, compensation, workforce structure, and communications. Here are some of the challenges that businesses may face:

Employee Expectations

While employer National Insurance Contributions increases are paid by employers, employees may still have questions, especially if their take-home pay looks different due to other payroll deductions, slower bonus or raise cycles. Make sure to communicate clearly about what’s changing and why, to avoid confusion among the team. 

Budgeting and Forecasting Considerations

As a result of rising employer National Insurance Contributions, human resources (HR) leaders must reassess the impact in all areas of the workforce:

• Compensation strategy
• Headcount targets
• Talent mix (full-time vs. part-time contractor)
• Pay band structures

Some companies may also rethink staffing altogether. There’s also increased interest in flexible models, such as hiring contractors. This allows companies to maintain workforce capacity while reducing exposure to employer-based payroll obligations like NICs. Our Global Contractor service covers the contracts and the payments where the person qualifies as a contractor.

Multi-Country Employers

For companies hiring in multiple countries, NICs change in the UK require careful separation in global payroll systems. Even small misalignments in classification or thresholds can lead to overpayment or compliance risk.

Hiring UK Staff Through an Employer of Record

If you're hiring UK-based talent through an Employer of Record (EOR), the EOR is the legal employer and makes the NICs payments. It is still critical to check that your provider is up to date. HMRC's PAYE rules for umbrella company supply chains, in force since April 6, 2026, treat any business that supplies workers it employs under a contract of employment as an umbrella company. Where no agency sits between you and that business, the rules can make you, as the end client, responsible for PAYE that goes unpaid.

Our EOR service handles UK tax registration and applies the current NICs thresholds as they change. If you have your own UK entity, our Global Payroll service runs the payroll on your own PAYE scheme. You stay the employer, so an eligible business still claims its own Employment Allowance.

5. Recommended Actions for Employers

To minimize risks and impact, we recommend that employers take the following actions:

1. Confirm Employment Allowance eligibility: Many firms that were previously disqualified can now benefit from the increase.
   
   
2. Review payroll software and NI calculators: Make sure your payroll software and calculators carry the current NICs thresholds and rates.
   
   
3. Consult with your payroll provider or EOR partner: Ask whether their systems and advisory teams are up to date on the current NICs rules and ready for any upcoming changes.
    
4. Review your 2026 payroll budgets: You must factor these elevated NICs baselines directly into your 2026 global hiring and compensation forecasts.
   
   
5. Adjust salary projections or HR budgets: You can take actions such as increasing pension contributions or equity to offset rising payroll taxes.
   
   
6. Communicate changes clearly to staff: Be sure to let your employees know of the changes made to their salary structure, so there’s no misunderstanding. 

Keeping your HR and payroll teams up to speed is especially important if your company operates in multiple countries. A common mistake companies make is intentionally misclassifying workers as contractors to avoid paying the mandatory employer contribution. Always ensure you understand the boundaries by reviewing our guide on Contract of Service vs Contract for Service to prevent severe HMRC penalties. 

If you want the rest of the 2026 UK picture in one place, including the National Living Wage rise and the day-one rights changes that sit alongside these NICs figures, our 2026 UK payroll update covers it.

6. How Slasify Can Help Your Global Business Expansion

The NIC changes are now the settled baseline for UK payroll. With a 15% employer rate, a £5,000 Secondary Threshold, and a wider Employment Allowance, businesses of all sizes are working from a different set of numbers than they were before the April 2025 changes. 

We own entities in Singapore, Hong Kong, Taiwan, Malaysia, Vietnam, and mainland China. The UK is not one of them. Across the rest of our 150+ countries, including the UK, we act as the legal employer through a network of 600+ local partners and entities. Through that network, we run the employment contract and the PAYE and National Insurance filings.

With our Employer of Record (EOR) and Global Payroll services, businesses can manage complex tax compliance across borders. We stay up to date with evolving local regulations so your teams don’t have to. 

Three services cover the work. Employer of Record, from 250 US dollars (USD) per month, when you want us to act as the legal employer. Global Contractor, from USD 50 per month, when the person qualifies as a contractor. Global Payroll, on quote, when you already have the entity and want the payroll run correctly. The Employer of Record and Global Contractor prices are published, so you can price those options before you speak to anyone. See our pricing.

So, whether you’re expanding into the UK market for the first time or growing a team there, Slasify helps you meet your compliance responsibilities. Contact us today to get started.

7. UK National Insurance FAQs

Q: What are the UK National Insurance rates for 2025/26 and 2026/27?

They are the same in both years. Employers pay 15% on earnings above the £5,000 Secondary Threshold. Employees on category A pay nothing below the £12,570 Primary Threshold, 8% between that and the £50,270 Upper Earnings Limit, and 2% on everything above it. Both years are published by HMRC, in the 2026 to 2027 and 2025 to 2026 employer guidance.

Q: What is the employer National Insurance rate in 2026?

15%, on every pound an employee earns above £5,000 a year (£417 a month, £96 a week). It has been 15% since April 6, 2025, and did not change on April 6, 2026. The rate is lower for some groups: employees under 21, apprentices under 25, and veterans in their first year of civilian employment are zero-rated up to £50,270 a year.

Q: What is the employee National Insurance rate, and where do the thresholds sit?

8% between £12,570 and £50,270 a year, then 2% above £50,270, on category A. In weekly terms, that is 8% between £242 and £967, then 2%. Those thresholds are unchanged between 2025/26 and 2026/27. Worked on the annual thresholds, the employee deduction on a £35,000 salary is £1,794.40 for the year.

Q: What is the Secondary Threshold, and how is it different from the Primary Threshold?

The Secondary Threshold is where your bill as the employer starts, at £5,000 a year. The Primary Threshold is where the employee's own deduction starts, at £12,570 a year. They are two different numbers doing two different jobs, and the gap between them is why an employee earning £10,000 pays no National Insurance while you pay £750 on them.

Q: How much is National Insurance, and how is it calculated?

It is calculated on earnings in each pay period, not on the annual salary as a lump sum, and the two sides are worked out separately. For the employer, take the pay above the Secondary Threshold for that period and apply 15%. For the employee, take the pay between the Primary Threshold and the Upper Earnings Limit and apply 8%, then 2% on anything above the Upper Earnings Limit. Worked on the annual thresholds, a £35,000 salary comes to £4,500.00 a year from you and £1,794.40 from them. Payroll normally uses the weekly or monthly thresholds instead, so the totals it produces can differ slightly.

Q: Did National Insurance change on April 6, 2026?

No Class 1 rate or threshold changed except the Lower Earnings Limit, which rose from £6,500 to £6,708 and affects benefit entitlement rather than what is paid. The 15% employer rate, the £5,000 Secondary Threshold, the £12,570 Primary Threshold, and the £50,270 Upper Earnings Limit all carried over. Outside Class 1, HMRC's rates and allowances tables show the voluntary Class 2 rate rising from £3.50 to £3.65 a week, the Small Profits Threshold from £6,845 to £7,105, and the voluntary Class 3 rate from £17.75 to £18.40 a week. Reimbursed eye tests for screen users, home working equipment used for the job, and flu vaccinations also became free of income tax and National Insurance on April 6, 2026, each on the conditions set out above. The National Living Wage rise to £12.71 came separately, on April 1, 2026.

Q: What does NI category A mean?

Category A is the standard National Insurance letter and applies to most employees. It gives the rates in the table above: 8% and 2% for the employee, 15% for you above the Secondary Threshold. The letter is what tells payroll which thresholds to use, so category M (under 21) and category V (veterans) carry the same employee rates but zero-rate your side up to £50,270. HMRC lists every letter in its National Insurance rates and categories guidance.

Q: What do EE NI and ER NI mean on a payslip?

EE NI is the employee's own contribution, deducted from gross pay, and it reduces take-home pay. ER NI is the employer's contribution, which is paid on top of the salary and never comes out of the employee's pay. ER NI often appears on a payslip for transparency, so seeing it there does not mean it has been deducted.

Q: Do I have to pay employers' National Insurance?

If you employ someone in the UK and pay them above the Secondary Threshold, yes, as long as you are resident or present in the UK, or have a place of business there, when the contributions become payable. That is the residence condition the contributions regulations set. An employer that meets none of those conditions is not required to pay under that rule, though it may choose to. Other rules can create or remove a liability, for example for a UK business the worker is placed with, or for a worker sent here temporarily from abroad, so check before relying on it. Employer's National Insurance is a cost on top of the salary, not a deduction from it. If you engage someone as a genuine contractor, there is no employer's National Insurance, which is why HMRC judges the relationship by how it works in practice, whatever the contract calls it.

Q: What is the Employment Allowance, and who can claim it?

£10,500 for both 2025/26 and 2026/27. It is a reduction in your secondary Class 1 bill rather than a cash payment, so it covers the first £10,500 of employer National Insurance you would otherwise pay in the year. The £100,000 eligibility cap that used to exclude larger employers was removed on April 6, 2025. Under HMRC's eligibility rules, you cannot claim if your company's only director is also the only employee paid above the Secondary Threshold, or if you are a business or public body doing more than half your work in the public sector, unless you are a charity. Staff employed for personal, household, or domestic work cannot be included unless they are care or support workers, and a group of connected companies gets one claim between them. You claim it again each tax year.

Q: Is Class 1A National Insurance still 15%?

Yes. Class 1A, which you pay on most benefits in kind and on termination awards above the threshold, is 15% in both 2025/26 and 2026/27. Class 1B, which applies to PAYE Settlement Agreements, is also 15% in both years.

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