Employers NI Calculator: How Much You Pay

This calculator works out the employer’s National Insurance contributions (Class 1 secondary contributions) you owe on a single employee’s gross pay. Enter the employee’s gross pay per pay period and the pay frequency, and you get the exact employer NI amount, the employee’s take‑home pay, and the total cost to your business. The calculation follows the current UK rules for the 2024/25 tax year.

Formula

The employer’s Class 1 National Insurance is calculated on the employee’s gross earnings above a threshold called the Secondary Threshold (ST). For the 2024/25 tax year, the ST is £758 per month (or £175 per week, £350 per fortnight, £700 per 4‑weekly period). The rate is 13.8% for most employees.

Formula: Employer NI = (Gross Pay – Secondary Threshold) × 13.8% – but only if Gross Pay is above the threshold. If it’s below, you pay £0.

For employees in certain categories (e.g., under 21, apprentices under 25, or some married women with reduced rate), the rate may be lower, but the calculator uses the standard 13.8% for the main category A.

Worked Example

Using the default values: gross pay = £2,500 per month, category A.

1. Secondary Threshold (monthly) = £758
2. Earnings above threshold = £2,500 – £758 = £1,742
3. Employer NI = £1,742 × 13.8% = £240.40
4. Employee NI (8% above £758) = £1,742 × 8% = £139.36
5. Income tax (assuming 20% basic rate on all pay, for simplicity) = £2,500 × 20% = £500
6. Take‑home pay = £2,500 – £139.36 – £500 = £1,860.64
7. Total cost to employer = £2,500 + £240.40 = £2,740.40

The calculator shows £240.40 for employer NI, matching the manual calculation.

When to Use This Calculator

Use this calculator when you need to budget for the true cost of employing someone, compare job offers, or prepare payroll. It’s particularly useful for small businesses and freelancers who are new to employing staff and need to set aside the right amount for tax.

Remember that this calculator only covers Class 1 National Insurance – you still need to account for income tax (PAYE), pension contributions, and any student loan repayments.

How to Read the Results

The Employer NI is the amount you, as the employer, must pay to HMRC on top of the gross salary. The Employee NI and Income Tax are deducted from the employee’s gross pay, and the Take‑home pay is what the employee actually receives. The Total cost to employer is your real outlay – gross pay plus employer NI.

If the result is £0, it means the gross pay is below the Secondary Threshold, so no employer NI is due.

Common Mistakes and Limitations

• Wrong threshold: Using the weekly threshold (£175) instead of the monthly (£758) when entering monthly pay – always match the threshold to your pay period.
• Ignoring category: The calculator assumes category A. If you employ someone under 21 or an apprentice under 25, the rate is 0% up to a higher threshold – you’ll need to adjust manually.
• Rounding: HMRC rounds to the nearest penny, and the calculator does as well, but if you have many employees, small differences can add up.
• Annual limits: The calculator doesn’t account for the annual Upper Earnings Limit (which affects employee NI) – it’s simplified for a single pay period.

Employer NI vs Employee NI

Many people confuse the two. Employee NI is deducted from the employee’s wages, while Employer NI is an extra cost paid by the business on top of wages. Both are calculated from the same gross pay, but the employer’s portion is a direct business expense. For a typical employee earning £2,500 a month, the employer pays an extra £240.40, making the true cost £2,740.40.

Alternatives and Related Calculations

If you need a full payroll breakdown, use a dedicated payroll software or a more comprehensive tax calculator that includes student loans, pension auto‑enrolment, and tax codes. This calculator is a quick tool for estimating employer NI only – it doesn’t replace official HMRC guidance.

Frequently Asked Questions

What is the employer NI rate for 2024/25?

The main rate is 13.8% on earnings above the Secondary Threshold. For employees under 21 or apprentices under 25, the rate is 0% up to a higher threshold (the Upper Secondary Threshold).

Do I pay employer NI on bonuses and overtime?

Yes, employer NI is calculated on all earnings, including bonuses, overtime, commission, and most benefits in kind. The threshold applies to the total gross pay for the pay period.

Can I claim back employer NI?

Employer NI is a deductible business expense for corporation tax, but there’s no direct refund. Some small businesses may be eligible for the Employment Allowance, which reduces the amount of employer NI you pay by up to £5,000 per year.

What happens if I pay my employee less than the Secondary Threshold?

If gross pay is below the threshold, you pay no employer NI. However, you still need to report the payment to HMRC through RTI (Real Time Information).

Does the calculator work for weekly-paid employees?

Yes, select “Weekly” from the frequency dropdown, and it will use the weekly threshold (£175) automatically. The formula adjusts the threshold based on the frequency you choose.

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in t | Gross pay | £ | 2500 | 0
sel f | Pay frequency | Monthly=1, Weekly=4.333, Fortnightly=2.167, Four-weekly=1.083
in p | Employee NI category | A=1, B=0.952, C=0, H=1, J=0.952, M=1, Z=1
out ni | Employer NI | £ | max(0, (t - 758) * 0.138) * p | 2
out ee_ni | Employee NI | £ | max(0, (t - 758) * 0.08) | 2
out take_home | Take-home pay | £ | t - ee_ni - (t * 0.20) | 2
out total_cost | Total cost to employer | £ | t + ni | 2