UK National Insurance Calculator

National Insurance (NI) is a tax on earnings paid by employees and employers in the UK. Employee NI funds the NHS, state pension, and certain benefits. Employer NI is a separate charge on top of gross wages — it is not deducted from the employee's pay but is an additional cost for the employer. Both are collected via PAYE alongside Income Tax.

Employees pay 0% on earnings below £12,570/year (the Primary Threshold), 8% on earnings between £12,570 and £50,270 (the Upper Earnings Limit), and 2% on everything above £50,270. These are the Class 1 Primary rates that apply from April 2025. NI is calculated on each pay period's earnings, not on the annual total, though the thresholds are scaled proportionally.

Employers pay 15% on each employee's earnings above £5,000/year (the Secondary Threshold). This threshold was reduced from £9,100 to £5,000 in the April 2025 Budget, meaning employer NI costs increased significantly for most businesses. For a full-time employee on £25,000/year, employer NI increased by approximately £618/year as a result of this change.

Eligible businesses can claim up to £10,500/year off their employer NI bill (increased from £5,000 in April 2025). Most businesses with an employer NI bill below £100,000 in the prior tax year qualify. Sole director companies with no other employees do not qualify. The Employment Allowance is claimed through your payroll software and offsets your employer NI liability each month until the allowance is used up.

NI is deducted via PAYE each pay period and paid to HMRC by the 19th of the following month (22nd if paying electronically). It is not paid separately from Income Tax — both go through your payroll run as a single PAYE payment. Most payroll software, and integrations like Xero and QuickBooks, calculate NI automatically.

Class 1 NI applies to employees who earn above the relevant thresholds. Workers under 16 are exempt from employee NI. Employees who have reached State Pension age no longer pay employee NI, though employer NI still applies. Some limited-hours or low-earnings workers may fall below the thresholds. Self-employed workers pay Class 2 and Class 4 NI, not Class 1 — these are different rates and thresholds.