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GovMath.

Business · Apr 2025

Employer NI Calculator

From 6 April 2025, Employer NI jumped to 15% (was 13.8%) and the threshold dropped to £5,000 (was £9,100). This is the change that hit small businesses hardest in 2025.

£

Total cost of this hire

£45,250

Breakdown

  • Salary
    £40,000
  • Employer NI @ 15% over £5k
    £5,250
  • Total employment cost
    £45,250

How we calculated your result

Class 1 Secondary NI = 15% × (salary − £5,000). Employment Allowance offsets the bill by up to £10,500/year — covering ~2 full-time minimum-wage roles entirely, but not available to one-employee director-only companies.

Official UK rules in simple English

  • Secondary threshold: £5,000/yr (was £9,100 pre-Apr 2025).
  • Rate: 15% (was 13.8%).
  • Employment Allowance: £10,500 (was £5,000) — claim via your payroll.
  • Not available to one-director-only companies, public bodies, or those with prior-year employer NI >£100k.

Common pitfalls to watch out for

  • ⚠ Director-only Ltd Co misses out

    Single-director companies can’t claim Employment Allowance. The standard tax-efficient salary is therefore £5,000 (no NI either side).

  • ⚠ Apprentices under 25

    Zero employer NI on earnings up to £50,270. Same for under-21s.

  • ⚠ Pension salary sacrifice

    Reduces NIable pay — saves both employer (15%) and employee (8%) NI. Huge total comp lever.

Frequently asked questions

How do I claim Employment Allowance?
Tick the box on your first EPS submission of the tax year via your payroll software.
What about Apprenticeship Levy?
0.5% on annual paybill over £3m — separate from Employer NI.

Educational. Always confirm with your payroll provider or accountant.

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