National Insurance Rates and Thresholds 2026/27

May 12, 2025

National Insurance (NI) is a key component of the UK's taxation system, contributing to the funding of social services, including the National Health Service (NHS) and welfare benefits.

As part of the UK government’s fiscal policy, National Insurance rates and thresholds are regularly reviewed and adjusted to ensure that they align with economic conditions and the country’s financial goals.

The upcoming tax year, 2026/27 , brings several updates to both employee and employer National Insurance contributions. This article outlines the key changes, helping both employers and employees navigate their responsibilities and obligations under the new system.

Overview of Recent National Insurance Changes

National Insurance is primarily paid by individuals in employment and self-employment, as well as by employers on behalf of their employees. The rates and thresholds for National Insurance contributions (NICs) are adjusted annually to reflect changes in the economy, with the intention of balancing the government's fiscal needs while maintaining fairness in the tax burden on workers and businesses.

For the tax year 2026/27, several important changes have been introduced. One of the key adjustments is the increase in employer NICs, particularly the reduction in the secondary earnings threshold, meaning NI is due at a lower salary for employers, and changes to the rates for certain categories of employees. Additionally, the freeze on personal allowance thresholds and certain NIC thresholds will continue, which could have significant implications for workers as their wages rise in line with inflation.

These changes are part of the broader fiscal strategy aimed at securing the country's public finances and ensuring that the welfare system remains sustainable.

Employee National Insurance Rates

For the 2026/27 tax year, employees will continue to pay National Insurance based on their earnings. The rates differ depending on the earnings band, and employees are classified into different National Insurance categories based on their employment status and other factors.

Primary Threshold (PT):

Employees start paying National Insurance on earnings above:

£242 per week
£1,048 per month
£12,570 per year

Contribution Rates

Employee contribution rates for 2026/27:

Earnings Band	Rate
Lower Earnings Limit to Primary Threshold	0%
Primary Threshold to Upper Earnings Limit	8%
Above Upper Earnings Limit	2%

The Upper Earnings Limit (UEL) equals £967 per week (£50,270 per year).

Example

An employee earning £1,000 per week pays:

£0 on the first £242
8% on earnings between £242.01 and £967 = £58.00
2% on the remaining £33 = £0.66

Total weekly National Insurance equals £58.66.

Employer National Insurance Rates

Employers pay National Insurance on employee earnings through payroll.

Secondary Earnings Threshold (ST)

Employer contributions start once earnings exceed:

£96 per week
£417 per month
£5,000 per year

Employer Contribution Rate

For the 2026/27 tax year employers pay:

Earnings Band	Rate
Up to Secondary Earnings Threshold	0%
Above Secondary Earnings Threshold	15%

This rate applies across earnings levels with no upper limit.

Certain employees qualify for reliefs. These include:

Employees under age 21
Apprentices under age 25
Armed forces veterans during their first year of civilian work

In these cases the employer rate drops to 0% up to the Upper Earnings Limit.

Class 1A and Class 1B Rates

Employers pay additional National Insurance on certain benefits.

Two classes apply.

Class 1A applies to benefits in kind reported on P11D forms
Class 1B applies to PAYE Settlement Agreements (PSAs)

Rates for 2026/27

Contribution Type	Rate
Class 1A	15%
Class 1B	15%

Employers report these benefits after the tax year ends. Most P11D submissions for 2026/27 occur in July 2027.

Employee Benefits and Expenses Also Subject to National Insurance

In addition to wages, many employee benefits, including company cars, private health insurance, and other perks, are also subject to National Insurance contributions. Employers must calculate the value of these benefits and ensure that the appropriate contributions are made.

Some expenses may also be subject to National Insurance. For example, payments for private use of a company vehicle or payments towards an employee’s personal mobile phone use can trigger additional National Insurance obligations.

Employers are required to report these benefits and expenses to HMRC, and they must ensure that the correct amount of Class 1A contributions is paid on them.

Conclusion

National Insurance is a critical aspect of the UK's social security system, and both employees and employers must remain aware of the rates and thresholds that apply to them. For the tax year 2026/27 , changes in the thresholds and rates are important to consider when planning for payroll and tax obligations. Employers, in particular, should be aware of their responsibilities for paying employer contributions, as well as the additional obligations tied to employee benefits.

Staying informed about National Insurance rates and thresholds is essential for compliance and for understanding how the system impacts both employees' take-home pay and employers' financial responsibilities.

FAQs Around Employer National Insurance

What is the Employers NI Rate for 2026/27 tax year?

For the 2026/27 tax year, employers will pay 15 % on earnings above the Secondary Earnings Threshold of £96 per week. This rate applies to all employees who fall within the specified earnings bands.

What is the Employers National Insurance Allowance?

The Employment Allowance allows businesses to reduce their employer National Insurance contributions by up to £10,500. This allowance is available to most employers, with some exceptions, such as those where the director is the sole employee.

How to Calculate Employer NI?

To calculate employer National Insurance contributions, identify the employee’s earnings within each threshold band. Employers pay 0% on earnings between the Secondary Earnings Threshold and Primary Earnings Threshold, and 15 % on earnings above the Primary Earnings Threshold.

Do Employers Have to Pay Employees NI?

Employers are responsible for deducting employees’ National Insurance contributions from their wages and paying them to HMRC. In addition, employers are required to pay employer National Insurance contributions on their employees' earnings.

What Percentage is National Insurance?

For employees in category A, the National Insurance rate is 8% on earnings between £242.01 and £967 per week and 2% on earnings above £967. For employers, the rate is 15% on earnings above the Secondary Earnings Threshold.

This concludes our review of National Insurance rates and thresholds for 2025/26. It’s crucial for both employees and employers to stay informed about these rates to ensure compliance and proper financial planning.

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