Employer NICs & Employment Allowance Check

Employer National Insurance contributions (NICs) are one of the largest and least visible costs of employing people. From 6 April 2025 the rate of secondary Class 1 employer NICs rose from 13.8% to 15%, and the secondary threshold, the point at which employers start paying, fell from £9,100 to £5,000 per employee per year. To soften the impact on smaller employers, the Employment Allowance was increased from £5,000 to £10,500 and the previous £100,000 eligibility cap was removed, so most employers with a secondary Class 1 liability can now claim it. Many businesses have not revisited their payroll settings, advisers’ assumptions or their annual claim since the change. Getting this wrong is costly in both directions. Under the Social Security Contributions and Benefits Act 1992 and HMRC’s PAYE regulations, employers who underpay face interest and penalties, while those who fail to claim Employment Allowance simply give money away. Claims must be made through payroll software, are subject to exclusions (for example, sole-director companies with no other employees paid above the secondary threshold, and certain public bodies and domestic employment), and must respect state aid rules. Connected companies and charities sharing a payroll also need to ensure only one claim is made. Regular checks on NIC category letters, apprentice and under-21 relief, and the allowance claim help ensure HMRC’s year-end reconciliation holds no surprises.

Use this free tool to check you are paying the right employer National Insurance and claiming Employment Allowance correctly. Get a plain-English report on rates, thresholds, eligibility and category letters, with clear next steps before your next payroll run.