Calculate Class 1 employee and employer National Insurance contributions based on HMRC 2025/26 and 2026/27 rates, with Employment Allowance and NI category support
| Band | Rate | Earnings in band | Employee NI |
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| Band | Rate | Earnings in band | Employer NI |
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Faiq Ur Rahman is a web designer, digital product developer, and founder of Toolraxy, a growing platform of web-based calculators and utility tools. He specializes in building structured, user-friendly tools focused on health, finance, productivity, and everyday problem-solving.
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National Insurance isn’t one tax. It’s two running side by side: the employee’s contribution, which comes straight out of your pay, and the employer’s contribution, which sits on top of your salary as a separate cost to the business. Most payslips show only the employee side. That’s the number that hits your net pay. But if you’re hiring, budgeting for a new role, or comparing a job offer against self-employed contracting, the employer side is the one that actually determines what you cost. This calculator handles both. Enter the salary, choose the right NI category, and you’ll see the full picture including how the Employment Allowance eats into the employer bill, and how categories like M or H zero out the employer rate for younger workers.
Leave the currency on GBP unless you’re modelling a different currency for comparison.
Type the gross annual salary into the first field.
Choose the tax year, 2025/26 or 2026/27.
Select the NI category letter that matches the employee. Category A covers most people.
Set the pay frequency if you want the summary table to reflect it.
Toggle Employment Allowance on if the employer qualifies for it.
Enter the number of employees the allowance needs to cover.
Read the result. The hero figure is the employee NI for the year.
Two calculations run in parallel. One for the employee, one for the employer. Same salary, different thresholds, different rates.
Formula: Employee NI = 8% × (Earnings between £12,570 and £50,270) + 2% × (Earnings above £50,270)
Formula: Employer NI = 15% × (Earnings above £5,000) − Employment Allowance used
The employee side uses two bands. Anything between the Primary Threshold (£12,570) and the Upper Earnings Limit (£50,270) gets charged at 8%. Anything above £50,270 gets charged at 2%. Earnings below the Primary Threshold pay nothing.
The employer side is flatter. One rate, one threshold. Everything above £5,000 gets charged at 15%, with no upper cap.
Same salary, two thresholds, two rates. The employer side has no upper cap.
The Employment Allowance then reduces the employer bill. You can claim up to £10,500 against the total employer NI across the business. If employer NI is less than £10,500, the allowance wipes it out entirely. If it’s more, you pay the difference.
NI categories change the rates and thresholds. Category C pays 0% because the employee is past State Pension age. Categories M, H, and Z drop the employer rate to 0% up to a higher threshold. Category B pays 1.85% instead of 8%. The calculator handles all eight categories.
Marcus earns £52,000 a year. He’s on Category A, under State Pension age, and his employer doesn’t claim the Employment Allowance because they’re a public sector body.
Step 1 – Employee NI main band: £50,270 − £12,570 = £37,700. Charged at 8% = £3,016.00.
Step 2 – Employee NI upper band: £52,000 − £50,270 = £1,730. Charged at 2% = £34.60.
Step 3 – Employee NI total: £3,016.00 + £34.60 = £3,050.60.
Step 4 – Employer NI: £52,000 − £5,000 = £47,000. Charged at 15% = £7,050.00.
Step 5 – Total NI cost: £3,050.60 + £7,050.00 = £10,100.60.
Marcus’s employee NI works out to 5.87% of his salary, and the employer adds another 13.56% on top. If his employer claimed the full Employment Allowance, the £7,050 employer bill would drop to zero, since the allowance caps at £10,500 and his employer NI is under that. Total NI would fall to £3,050.60.
On £45,000 with Category A, you pay £2,594.40 in employee NI. That’s 8% on £32,430, the gap between the Primary Threshold and your salary. Your employer pays 15% on £40,000, which is £6,000 before any Employment Allowance.
Yes, on their own earnings above £12,570. The difference is on the employer side. Category M means the employer pays 0% up to the Upper Secondary Threshold of £50,270, instead of the usual 15% from £5,000. That’s a genuine saving for businesses hiring young workers.
The Upper Earnings Limit is £50,270 for 2025/26. Above that figure, employee NI drops from 8% to 2%. It’s the same figure as the higher-rate income tax threshold, which is why the two taxes step up together at the same salary level.
Usually no. If you’re the only employee of your own limited company and you’re paid above the Secondary Threshold, HMRC blocks the claim. There are exceptions — if you have other employees on payroll, or if your company does charitable work, you may still qualify.
HMRC applies the thresholds per pay period, not annually. A weekly-paid employee has a weekly Primary Threshold of about £241.85 instead of the annual £12,570. The calculator gives annual figures, which match what a steady weekly pattern produces over a full year.
You’ll either overpay or underpay. Overpaid NI is refundable, usually through a new tax code or a direct HMRC claim. Underpaid NI is more painful, HMRC treats it as arrears and may apply penalties. Check your payslip if anything looks off after a life event like turning 21 or reaching State Pension age.
Yes, Class 1 contributions from employment count towards your State Pension. You need 35 qualifying years for the full new State Pension. Years with low earnings may still count if you were above the Lower Earnings Limit (£6,500 for 2025/26), even if no NI was actually deducted.
No. They’re separate taxes with separate thresholds, rates, and rules. Income tax funds general public spending. NI funds specific social insurance programmes, mainly the State Pension and the NHS. Both come out of your pay, but they’re calculated independently.
Class 1 is for employees, it comes out of payroll. Class 4 is for self-employed people, calculated on annual profits. Class 4 rates are 6% on profits between £12,570 and £50,270, then 2% above. Self-employed people also pay Class 2, which is a small flat weekly charge.
No, not if you’re employed and earning above the Primary Threshold. NI isn’t optional the way pension contributions are. You can reduce the amount through salary sacrifice, and you stop paying once you reach State Pension age, but there’s no formal opt-out while you’re working and below that age.
Rates and allowances: National Insurance contributions
Official HMRC publication containing all Class 1–4 NI rates, thresholds, and limits for the current and previous tax years.
Rates and thresholds for employers 2025 to 2026
National Insurance rates and categories
Employment Allowance: Official page confirming the allowance is £10,500 for 2025/26 (up from £5,000 in previous years), with eligibility rules and exclusions.
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