National Insurance contributions (NICs) are a vital consideration for UK employers when budgeting for payroll and employment costs. For the 2025/26 tax year, there are some key rates and thresholds you need to know to maintain compliance and effective financial planning. This guide offers a quick overview of the most relevant information for employers.
What is Employers’ National Insurance?
Employers pay Class 1 National Insurance contributions on their employees’ earnings above certain thresholds. These contributions fund state benefits such as the NHS, pensions, and statutory payments. Employers are also responsible for:
- Deducting employee NICs through PAYE
- Paying their own NICs on top of gross salaries
- Reporting and paying contributions to HMRC
Employers’ NIC Rates for 2025/26
As of the 2025/26 tax year, the standard rate of Employer NIC remains unchanged.
1. Primary Thresholds for Employer NICs
| Earnings Band | Weekly Threshold | Annual Equivalent | NIC Rate |
|---|---|---|---|
| Below Secondary Threshold | £123 | £6,396 | 0% |
| Above Secondary Threshold | £175 | £9,100 | 13.8% |
| Above Freeport / Investment Zones | Varies | Special rates | 0% or reduced |
Note: Employers pay 13.8% on earnings above £175 per week for most employees.
2. Employer NICs for Under-21s and Apprentices under 25
To encourage youth employment, a reduced NIC rate applies for:
- Employees under 21 years old
- Apprentices under 25 years old
NIC Rate:
- 0% on earnings up to the Upper Secondary Threshold of £967/week (£50,270/year)
- 13.8% on any earnings above that
3. Employer NIC Relief in Special Zones
If your business operates in one of the government’s designated zones, you may qualify for NIC relief:
- Freeports
- Investment Zones
- Special Economic Areas
Relief includes:
- 0% Employer NICs on qualifying earnings up to £25,000 per annum for each eligible employee, for up to 3 years.
Check HMRC guidance for specific zone eligibility and administration requirements.
Additional Employer NIC Costs
-
Class 1A NICs on most benefits in kind (e.g., company cars)
- Rate: 13.8%
- Due annually, separate from PAYE
-
Class 1B NICs if you have a PAYE Settlement Agreement (PSA)
- Covers tax and NICs on minor or irregular benefits
Handy Tips for Employers
-
Use reliable payroll software
- Most systems automatically apply correct rates and thresholds.
-
Monitor employee ages and apprenticeship status
- Ensure under-21s and apprentices under 25 are correctly flagged for relief.
-
Audit employee locations
- You could qualify for zone-based reliefs depending on where your staff are based.
-
Keep up to date with HMRC announcements
- Mid-year updates can sometimes affect thresholds or special schemes.
-
Factor NIC costs into employment planning
- NICs have a big impact on the total cost of employment, especially for higher earners.
Summary at a Glance
- Standard Employer NIC Rate: 13.8% above £175/week
- Under-21s / Apprentices under 25: 0% up to £967/week
- Benefits in Kind: Class 1A NICs at 13.8%
- Special Zones: 0% on qualifying earnings up to £25,000/year
- PAYE Settlement Agreement (PSA): Class 1B NICs apply
Need help applying the correct NI rates, under-21/apprentice reliefs and Freeport rules in your software? Our payroll services handle setup, RTI/EPS submissions and monthly compliance.