A worked example
Eighteen employees, each treated as earning the £32,000 average (all are above the threshold, so the total is the same as for a spread of salaries). The business can claim the Employment Allowance. Annual thresholds are used; payroll works in weeks or months, which moves the total by a few pounds.
| 2027/28 | Before the Budget | After the Budget | Difference |
|---|---|---|---|
| Employer's National Insurance each: (£32,000 − £5,000) × 15% | £4,050.00 | £4,050.00 | |
| For 18 employees | £72,900.00 | £72,900.00 | |
| Less the Employment Allowance | −£10,500.00 | −£10,500.00 | |
| Employer's National Insurance for the year | £62,400.00 | £62,400.00 | £0.00 |
| Each employee after the allowance | £3,466.67 | £3,466.67 | £0.00 |
| Cost of each employee, salary plus National Insurance | £35,466.67 | £35,466.67 | £0.00 |
| With the minimum pension, 3% of (£32,000 − £6,240) | £36,239.47 | £36,239.47 | £0.00 |
Two employer changes elsewhere in the Budget do not change this bill:
- Company cars, vans, fuel and medical benefits are to be reported through payroll from 6 April 2027, with the remaining benefits from 6 April 2028.
- From April 2029, employers will need a Direct Debit instruction in place for PAYE liabilities.
For staff on the minimum wage, the wage itself rises from April 2027: see the minimum wage page.
When it takes effect
Nothing changes in the rate, the threshold or the allowance for 2027/28. The secondary threshold (£5,000 a year, £96 a week) and the other limits, apart from the Lower Earnings Limit, stay at their 2026/27 levels until 2030/31.
Who it doesn't affect
The Budget left employer's National Insurance alone, so no employer's bill changes because of it. Businesses that cannot claim the Employment Allowance (for example, a company whose only employee paid above the threshold is its sole director) pay the £72,900 here without the allowance, as before.
Where this comes from
- Budget 2026 (HM Treasury), "Keeping the government's tax commitments": no increase to the headline rates of National Insurance contributions
- Budget 2026: Overview of Tax Legislation and Rates (HMRC), section 2.1: National Insurance limits and thresholds other than the Lower Earnings Limit kept at 2026/27 levels until 2030/31; section 1.24: payrolling of benefits in kind
- Budget 2026 OOTLAR, Annex A, National Insurance contributions: employer's rate 15% above the secondary threshold, the secondary threshold £96 a week, and the Employment Allowance £10,500, for 2026/27 and 2027/28
- Budget 2026 (HM Treasury), Table 6.1 (policy decisions): no measure on the employer's rate, the secondary threshold or the Employment Allowance; mandatory payrolling of company cars, vans, fuel and medical benefits from 6 April 2027
- Budget 2026 (HM Treasury), "Measures to close the tax gap and modernise the tax system": a Direct Debit instruction required for PAYE return liabilities from April 2029
- Rates and thresholds for employers 2026 to 2027 (HMRC): employer's Class 1 National Insurance at 15% above the £5,000 secondary threshold; Employment Allowance £10,500
- Autumn Budget 2024: Overview of Tax Legislation and Rates (HMRC), sections 2.1 and 2.3: the £5,000 secondary threshold until 5 April 2028, the 15% rate and the £10,500 Employment Allowance
- Employment Allowance: eligibility (GOV.UK): who can claim
- Workplace pensions: what you, your employer and the government pay (GOV.UK): the employer minimum of 3% of earnings between £6,240 and £50,270
Every figure on this page comes from the Budget documents published on GOV.UK on , and was checked by Lewis Back ACA. Last updated . It is general information, not advice on your own position.