What the secondary threshold sets
Employer NI, also called secondary contributions, is a cost on top of wages that is never deducted from the employee. The secondary threshold is where it begins. In 2026/27 it sits below both the lower earnings limit (£129) and the primary threshold (£242), so you can owe employer NI on someone who pays none themselves.
Some employees carry upper secondary thresholds that move the start of employer NI much higher. HMRC's 2026/27 table sets £967 a week (£50,270 a year) for under-21s, apprentices under 25 and veterans in their first civilian job, and £481 a week (£25,000 a year) for staff at a Freeport or Investment Zone special tax site. Below those thresholds the employer rate for their letters is 0%.
Many small employers can also claim the Employment Allowance, which GOV.UK says reduces annual employer Class 1 NI by up to £10,500.
Employer NI on three employees
| Employee | Monthly pay | Letter | Employer NI |
|---|---|---|---|
| Office manager, 34 | £2,000 | A | (£2,000 − £417) × 15% = £237.45 |
| Part-time assistant, 52 | £400 | A | £0 (below £417) |
| Trainee, 19 | £1,800 | M | £0 (below £4,189) |
The month's employer NI is £237.45. Had the trainee been 21, letter A would apply and add (£1,800 − £417) × 15% = £207.45.
Employer NI and the payslip
Employer NI is not a deduction, so it does not reduce net pay and does not need to be on the payslip, which GOV.UK says must show earnings before and after deductions and the deductions themselves. Many payslips still print it under a heading such as Employer contributions, for information. If yours does, keep it visibly apart from the employee's deductions.
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Related terms
Questions
What is the secondary threshold for 2026/27?
£96 a week, £417 a month or £5,000 a year. Employers pay Class 1 National Insurance at 15% on earnings above it, unless an upper secondary threshold applies to the employee's category letter.
Do employers pay NI for under-21s?
Not on earnings up to the upper secondary threshold for under-21s, £967 a week or £4,189 a month in 2026/27. Above that, 15% applies. Use category letter M, or Z if the employee is deferring.
Why is the secondary threshold lower than the primary threshold?
They are set separately. The secondary threshold for employers is £5,000 a year in 2026/27, while the primary threshold for employees is £12,570, so employer NI starts on lower pay than employee NI.
Sources
- HMRC: Rates and thresholds for employers 2026 to 2027 (read 8 October 2026)
- GOV.UK: Claim Employment Allowance (read 8 October 2026)
- GOV.UK: Payslips (read 8 October 2026)
Figures are for the 2026/27 tax year unless the text says otherwise. This page explains a payroll term; it is general information, not tax or legal advice.