Employer National Insurance at 15%: what a hire really costs, and the £10,500 allowance
Since April 2025, employers pay 15% National Insurance on earnings above £5,000 a year. The Employment Allowance takes up to £10,500 off the bill, but not for every company.
The cost of an employee is more than their salary. On top of pay, an employer pays Class 1 National Insurance at 15% on earnings above the secondary threshold of £5,000 a year, plus at least 3% of qualifying earnings into a workplace pension. The thresholds are frozen at 2026-27 levels until 2030-31.
15% of salary above £5,000, before the Employment Allowance.
Show the data
| £20,000 | £2,250 |
|---|---|
| £30,000 | £3,750 |
| £50,000 | £6,750 |
The Employment Allowance
Eligible employers can reduce their employer National Insurance by up to £10,500 a year. It is used up through payroll until it runs out or the tax year ends. Since April 2025, employers with bills above £100,000 can claim too. Charities can claim even if they work mostly in the public sector.
Who cannot claim
- A company with one director, where that director is the only employee paid above £5,000.
- Public bodies and businesses doing more than half their work in the public sector, unless they are charities.
- Some businesses that have had other state aid, which can limit the claim.
Planning a hire
For a small team, the allowance can cover the National Insurance on two or three salaries entirely. Budget the full cost of a role, including pension, holiday cover and equipment, and check the allowance is claimed in your payroll software at the start of each tax year.
This insight is general information, not advice for your circumstances. Talk to us before acting on it.