What national insurance do employers pay?
Answered 11 March 2026
Employer National Insurance Contributions
What the law says
Employers pay secondary Class 1 National Insurance contributions (NICs) on their employees' earnings. The key legislative provisions are:
Rate and Threshold (from 6 April 2025):
- The rate of secondary Class 1 NICs is 15% (increased from 13.8%), applied to all earnings above the Secondary Threshold
- The Secondary Threshold from 6 April 2025 is £96 per week / £417 per month / £5,000 per year (reduced from the previous £175/£758/£9,100)
- Unlike primary (employee) contributions, secondary NICs are payable at a single percentage rate on all earnings above the Secondary Threshold — there is no upper limit
Employment Allowance: From 6 April 2025, the Employment Allowance is increased to £10,500 (from £5,000), and the previous £100,000 secondary Class 1 liability cap for eligibility has been removed
HMRC Guidance / Practice
Employers pay NICs across three classes:
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Class 1 (secondary contributions) — payable on employees' earnings above the Secondary Threshold, collected alongside PAYE
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Class 1A — payable only by employers on most taxable benefits in kind provided to employees
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Class 1B — payable by employers as part of a PAYE Settlement Agreement (PSA), replacing any Class 1 or Class 1A liability on items included in the PSA, and also charged on the total tax payable under the PSA
Special cases — reduced/zero rates:
- Employees under 21: 0% secondary NICs on earnings up to the Upper Secondary Threshold (UST); the standard rate applies above it
- Apprentices under 25: 0% secondary NICs up to the Apprentice Upper Secondary Threshold
- Armed forces veterans: 0% for 12 months from their first civilian employment after leaving the armed forces (available through 2025-26)
- Freeport/Investment Zone employees: 0% up to the Freeport/Investment Zone Upper Secondary Threshold for up to 36 months
Post-retirement age employees: If an employee works beyond State Pension age, employee primary NICs cease but the employer must continue paying secondary contributions
The employer is responsible for paying over both the employee's primary and their own secondary contributions to HMRC
Citation sources
Secondary threshold for secondary Class 1 contributions 2 1 The Social Security (Contributions) Regulations 2001 ( S.I. 2001/1004 ) are amended as follows. 2 In regulation 10 (d) (the secondary threshold for secondary Class 1 contributions), for “£175” substitute “£96” . 3 In regulation 11 (3A) (prescribed equivalents of the secondary threshold)— a in sub-paragraph (a) , for “£758” substitute “£417” , and b in sub-paragraph (b) , for “£9,100” substitute “£5,000” . 4 The amounts substituted by th
Class 1B National Insurance Contributions are charged as part of a PAYE Settlement Agreement (PSA). A PSA is a voluntary agreement for the employer to pay tax and NIC on certain expenses and benefits in kind given to employees. Only employers pay Class 1B NIC, and the amount due is worked as a percentage of the PSA.
At Budget 2020 the Chancellor announced a new secondary Class 1 National Insurance contributions relief for the employers of veterans. This relief provides a zero-secondary Class 1 NICs rate on the earnings of Veterans for 12 months, starting from the first day of a Veterans first civilian employment after leaving HM Armed Forces. Subsequent and concurring employers can benefit from this relief for that period. To qualify, a Veteran must have completed at least one day of basic training in HM re
The National Insurance Contributions Act 2022 provides for a zero-rate of secondary Class 1 NICs for Freeport and Investment Zone special tax site employers. The zero-rate of secondary NICs applies only in respect of qualifying employees for a maximum period of 36 months. The definition of a qualifying Freeport and Investment Zone special tax site employer and employee can be found at NIM01510 and NIM01515. The zero-rate applies to earnings between the Secondary Threshold (ST) and the Freeport U
If an employee continues working after the normal state retirement age, employee’s primary National Insurance is no longer due but the employer must continue to pay secondary contributions. National Insurance debts arise as many employers fail to pay their secondary contributions correctly, particularly when they are operating Contracted-Out schemes.
No changes have been made to the way in which secondary NICs are calculated. However, from 6 April 2011 the Secondary Threshold is no longer aligned with the Primary Threshold. From 6 April 2025 the Secondary Threshold is set at an amount below the Lower Earnings Limit (LEL). Secondary NICs are due on all earnings above the Secondary Threshold at a single percentage rate unless the employer is eligible to claim a NICs relief which provides a 0% rate of NICs between the Secondary Threshold and an
Some content of this manual is being considered for archiving. If there is content you use regularly, please email hmrcmanualsteam@hmrc.gov.uk to let us know as soon as possible. National Insurance Contributions are divided into classes: Class 1 payable by employers (secondary class 1 contributions) and employees (primary class 1 contributions) on earnings from employment and usually collected alongside PAYE. Class 1A payable only by employers and some third parties on most taxable benefits prov
A 0% rate of secondary Class 1 NICs for employees under the age of 21 was introduced from April 2015. Primary Class 1 NICs will remain unchanged. The 0% rate applies to earnings between the Secondary Threshold (ST) and a new Upper Secondary Threshold (UST). See NIM01297. Earnings above the UST will be assessed using the secondary Class 1 percentage rate. The 0% rate applies to new and existing employees and does not exclude any employees or employers. New category letters (see NIM01298) have bee
A PAYE Settlement Agreement (PSA) is a statutory arrangement with HMRC under which an employer can pay the income tax liability and Class 1b National insurance on minor benefits in kind and expenses payments given to their employees. Income Tax (Earnings and Pensions) Act 2003 Chapter 1 Part 11, Pay As You Earn Chapter 5 contains the regulations for PSAs. Employers with a PSA become liable for the income tax and NICs payable and their employees are relieved of liability on the benefits and expen
Class 1 NICs are paid by: employees, who pay primary contributions employers, who pay secondary contributions. The employer is responsible for paying over the total contributions due to HMRC. The vast majority of Class 1 National Insurance is accounted for on BROCS and collected alongside PAYE through IDMS. However, Class 1 NICS debts are also sent to DTOs for collection from: NICO Employer Compliance.