Guide
Employer NI increase April 2025: what changed and what it costs
Written by EmployerCalculator Editorial · Reviewed against official UK sources · Last updated: April 2025
Understand the April 2025 employer NI changes, including the 15% rate, £5,000 threshold and Employment Allowance increase.
What changed on 6 April 2025
From 6 April 2025, employer Class 1 National Insurance moved from 13.8% to 15% and the secondary threshold moved down from £9,100 to £5,000. This means more of each employee salary is NIable and the NIable slice is taxed at a higher rate.
For employers with stable headcount, this change raises payroll cost without increasing gross pay. In practical terms, budget pressure appears first in monthly payroll because NI is remitted through PAYE in real time.
Employment Allowance increased to £10,500 and the previous £100,000 Class 1 NI cap was removed. Eligible employers can therefore offset more of the increase than in 2024/25, but the offset still depends on your total annual NI bill.
Cost effect by salary band
At £30,000 salary, gross employer NI increases materially because both the threshold and rate changed. The threshold reduction alone exposes an extra £4,100 to NI, before applying the higher percentage.
At higher salaries the percentage rate change dominates, while at lower to mid salaries both elements are significant. Employers with high-volume lower-paid teams often feel the threshold reduction most acutely.
Scenario planning should model salary, pension, and overheads together. Looking at NI in isolation can understate total employment cost and lead to under-budgeting on offers and workforce plans.
Operational actions for payroll teams
Confirm payroll software is on 2025/26 NI parameters and that Employment Allowance claims are configured correctly. Errors here compound across every pay run.
Update hiring calculators and salary benchmarking sheets used by managers. Offer approval workflows should reference total employer cost, not headline salary only.
Keep a documented assumptions log for board reporting. Most payroll variance questions can be answered quickly if threshold, rate, pension, and allowance assumptions are explicit.
Use the calculator
Put the figures from this guide into practice with the live calculator tools below.
Frequently asked questions
What is the employer NI rate for 2025/26?
For 2025/26, the standard employer NI rate is 15% on earnings above the £5,000 secondary threshold.
Does Employment Allowance reduce employer NI?
Yes. Eligible employers can offset up to £10,500 of annual employer NI in 2025/26.
Is this calculator financial or legal advice?
No. It provides estimates only, based on stated assumptions.