National Insurance contributions calculator
Check your employer National Insurance costs with our simple NI calculator.
Compare contributions across different financial years in just a few clicks.
Check your employer National Insurance costs with our simple NI calculator.
Compare contributions across different financial years in just a few clicks.
Simply enter your employee's salary details below and we will calculate how your employer contributions will change.
Enter your employee's salary:
Select the financial years you would like to compare:
Month | Employer NI (2024/25) (£) | Employer NI (2025/26) (£) | Difference (£) |
---|---|---|---|
Total | £0.00 | £0.00 | £0.00 |
National Insurance contributions (NICs) are essential for employers in the UK, they pay for social security benefits, including the state pension and are compulsory for any business with employees earning above specified thresholds.
The calculation of NICs is based on earnings thresholds, employers pay 13.8% on earnings above the threshold, and upcoming changes will increase this to 15% from April 2025.
Recent changes to National Insurance rates and thresholds reminds us to stay informed to manage finances and remain compliant.
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National Insurance contributions (NICs) are the backbone of the UK’s social security system. Employers pay these contributions so employees can qualify for benefits like the state pension and tax and national insurance. In short your business needs to comply with NICs for both legal and employee benefits.
All employers with employees aged 16 and over earning above specific thresholds must pay National Insurance contributions. Beyond being a legal requirement these contributions are an investment in your workforce’s future and grants access to contributory benefits.
Knowing how much National Insurance your business owes and understanding how it’s calculated is key to financial management.
Earnings thresholds play a big part in determining National Insurance payments. The Secondary Threshold is the point where employers start paying National Insurance for their employees. Earnings below this threshold are exempt.
At the other end of the scale the Upper Earnings Limit is the cap on the amount of earnings subject to the standard rate of NICs. Knowing these thresholds allows you to convert your employees’ gross earnings into National Insurance contributions.
This was by far the most significant announcement from the 2024 Autumn Budget. In the speech, the Chancellor announced that:
This is a significant tax rise for employers. In fact, it amounts to an increase of roughly £986 a year for employees on £40,000 and around £1,226 a year for those on £60,000.
But for some SMEs, there’s a silver lining. The Employment Allowance will also be increased from £5,000 to £10,500, meaning you’ll be able to employ roughly four employees on minimum wage before paying National Insurance.
To calculate National Insurance for employers apply the rates to employees’ earnings above the Secondary Threshold. It seems daunting but with the right tools and knowledge it’s simple. Luckily we have a National Insurance calculator above that not only shows the NI calculation but also shows the changes from one year to another so you can keep track of your contributions.
To help visualise it we’ll share an example calculation below:
An employer is calculating NICs for an employee earning £1,000 per week. The employer pays 13.8% on earnings above the Secondary Threshold. With the employment allowance of £10,500 the first portion of the NICs may be offset against this allowance.
For earnings above £967 per week the employer would apply the standard rate of 13.8% in 2024/25, so all calculations are accurate and compliant. As of April 2025 this rate has increased to 15% so understanding allowances and thresholds is key to the calculation.
Salary Sacrifice Schemes for Employers
Salary sacrifice schemes allow employees to reduce their gross pay in exchange for benefits like pension contributions. This reduction in gross pay reduces the amount of National Insurance for employers too.
Employers must ensure employees’ salaries don’t fall below the National Minimum Wage when using these schemes. Compliance is key to maximise benefits.
Special considerations in National Insurance calculations include benefits-in-kind which can affect the contributions owed. Employers must report these using forms like the P11D and may face additional NICs.
Directors’ NICs require special attention as they are calculated annually not monthly. Understanding these rules is key to getting it right.
Benefits-in-kind such as company cars or health insurance are non-cash benefits provided to employees. These benefits attract Class 1A contributions which are paid annually via the P11D(b) form. Employers must report these benefits accurately to ensure the correct amount of NICs is paid.
Understanding benefits-in-kind helps in managing overall contributions.
Directors’ National Insurance contributions are unique in that they are calculated on their annual income. This annual earnings period affects both the timing and amount of contributions, unlike regular employees.
Directors’ earnings can be classed differently for NIC purposes. Understanding these differences means compliance and correct payment of contributions.
Working out NICs doesn’t have to be complicated.
Our calculator at the top of the page gives you a quick estimate of employer ni contributions based on annual salary and financial year.
If you need a more detailed breakdown - including both employer and employee contributions - the Gov.UK National Insurance calculator can help.
Voluntary contributions can be useful for employers with employees with gaps in their National Insurance history, to keep them eligible for benefits and the State Pension. Check employees’ National Insurance records regularly to ensure no gaps affect future benefits.
National Insurance contributions affect state pension eligibility for employees. At least 10 years of contributions are needed to qualify for the new state pension which can be achieved through paid contributions, credits, or voluntary contributions.
Number of qualifying years determines the state pension amount. Having a complete NI record is key to maximising state pension benefits.
Recent changes in National Insurance rates and thresholds are big for employers, especially with the national insurance changes. Employer NIC rate increases to 15% in April 2025 and the employment allowance will rise too reducing the NIC liability for businesses.
Freezing the NI threshold means more people will pay NIC as wages rise. Being informed about these changes helps you plan and manage your contributions better.
While this is for employers, understanding self employed NICs can be useful if you have contractors in your business. Self employed individuals have Class 2 and Class 4 NICs.
In summary, knowing and calculating National Insurance correctly is key for employers. From knowing the thresholds and rates to using the NI calculator, be informed and you’ll manage your finances better.
By following this guide you’ll be compliant, optimise your contributions, and secure your business’s financial future. Stay up to date with national insurance changes, use payroll software for accurate calculations and consider benefits and allowances on your overall liability.
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