Employer NIC Calculator
Use our calculator to estimate your NIC, along with the breakdown of your true cost when you hire a new employee.
Employers National Insurance Calculator
| Yearly | Monthly | Weekly | Daily | |
|---|---|---|---|---|
| Salary | £0.00 | £0.00 | £0.00 | £0.00 |
| Employer NI | £0.00 | £0.00 | £0.00 | £0.00 |
| Net Liability | £0.00 | £0.00 | £0.00 | £0.00 |
| Take-home | £0.00 | £0.00 | £0.00 | £0.00 |
Enter your annual income. Exclude expenses and VAT.
Specify tax year.
For easy comparison, the calculator automatically generates your estimated take-home income for both options simultaneously.
The calculation is based on the assumption that you are entitled to claim a personal allowance and earn a tax-efficient salary.
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Employer NIC Calculator (Guide)
Use the employer NI contributions calculator to estimate your NIC responsibilities for new or current employees. Employer NICs are paid monthly and are paid in addition to an employee's NIC.
What is an Employer's National Insurance?
Employers pay to HMRC a Class 1 National Insurance on employees' income.
Provided certain conditions are met, you can reduce Employer's National Insurance through Employment Allowance, currently £5,000 for the tax year 2023/24.
How does an employer NI calculator work?
National Insurance contributions, or NICs, are calculated as a percentage of your employee's income.
Enter your employees' annual gross pay, including additional benefits like overtime or bonuses, to calculate NICs.
Calculate employer NI yearly, monthly, weekly, or daily.
Types of National Insurance Contributions
Employers make annual contributions to Class 1A and Class 1B National Insurance on the expenses and benefits they provide to their employees. These are included in the employer's PAYE bill.
These are due to employee benefits such as a business phone, company car, and health insurance that the firm provides. They must be first reported and paid at the end of each tax year.
Employer NI is calculated at a rate of 13.8% and is based on the value of taxable benefits provided in the previous financial year (2022/23: 15.05% between 6 April 22 to 5 November 22 and 14.53% between 6 November 22 and 5 April 23).
Suppose an employer has a PAYE settlement agreement allowing a single annual payment to cover their tax and benefits responsibilities. In that case, Class 1B contributions are payable. On trivial or irregular taxable expenses or benefits, employees must pay NICs.
What are Employer Class 1 National Insurance rates?
Almost all employees are subject to 13.8% Class 1 NICs on employee income above the secondary threshold.
Secondary thresholds:
£175 per week, £758 per month, or £9,100 per year in 2023/24;
£175 per week, £758 per month, or £9,100 per year in 2022/23;
£170 per week, £737 per month, or £8,840 per year in 2021/22;
£169 per week, £732 per month, or £8,788 per year in 2020/21.
Employers of employees under the age of 21 and certain apprentices under the age of 25 pay 0% up to £4,189 per month.
Secondary-level thresholds:
£967 per week, £4,189 per month, or £50,270 per annum in 2023/24.
£967 per week, £4,189 per month, or £50,270 per annum in 2022/23.
£967 per week, £4,189 per month, or £50,270 per annum in 2021/22.
£962 per week, £4,167 per month, or £50,000 per annum in 2020/21.
When do I have to pay National Insurance?
Are you using a Pay As You Earn (PAYE) system? You won't have to do anything additional as your employer's National Insurance Contributions will be calculated and added automatically to your PAYE liabilities by your payroll software.
If your employees earn more monthly, you must pay more employer National Insurance, as it is a % of your employee's earnings.
Employer NI calculations are done using your Self Assessment tax return if you run your business. Check out our sole trader NI calculator.
Employer NIC on Benefits you receive from your employer
Employer NICs apply to several employee benefits. It is determined by the benefits provided.
Class 1 NICs are collected through PAYE. Several "trivial benefits" worth less than £50 are usually exempt. Directors of business with five or fewer shareholders cannot get more than £300 in nominal benefits in a tax year.
Employer National Insurance contributions can be difficult to understand. Most businesses use payroll software or a payroll agency to manage this.
How to inform HMRC about your expenses and benefits?
When an item or benefit is not exempt from NICs liability or is provided as part of a salary sacrifice scheme, it is now typically reported through the monthly payroll.
You must report non-payroll expenses on a P11D.
Employers can reimburse employees using a scale or flat rates rather than the actual expenditures paid to simplify reporting. The following are the scale rates:
HMRC- authorised fuel advisory rates; or
Rates agreed in writing by HMRC
What is a PAYE settlement agreement in terms of national employer insurance?
HMRC does not require reporting expenses and benefits reimbursed using approved scale rates. Every five years, you must renew approval notices.
A PAYE settlement agreement with HMRC can help firms simplify their National Insurance responsibilities.
A settlement agreement may cover the following costs and benefits:
Minor
Irregular
Difficult to handle through PAYE
For example, you cannot include cash payments, beneficial loans, or frequent significant benefits.
You can also make a single Class 1B employer NIC payment by the 22 October following the agreement's tax year, depending on the total value of all the benefits covered by the contract.
What is a National Insurance number?
A National Insurance Number is an identification number that links your NIC contributions and taxes against your name. It also proves your eligibility for certain government-funded benefits like state pensions, compulsory sick pay, and maternity and paternity leave.
What are the employer's responsibilities?
Employers have a responsibility to:
Deduct primary Class 1 contributions from employees' wages.
Each time a payment is made to an employee under RTI, provide details of pay and deductions to HMRC electronically (including Class 1 and any Class 1A contributions necessary on termination settlements over £30,000 and sporting testimonials over £100,000).
Pay employee and employer NIC to HMRC by the 22nd of the month following the end of the tax month.
Keep track of each employee's wages and NIC payments.
Follow all year-end processes.
Calculate contributions for items covered by PAYE settlement agreements under Class 1B. (PSAs).s
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