Updated for 2026/27

Employer NI calculator for directors 2026/27

Employer NI at 15% on director salary above £5,000 is a real company cost. This version highlights the employer NI figure alongside the salary cost and the personal take-home trade-off.

Quick answer (2026/27): a company pays 15% employer NI on director salary above £5,000. On the common £12,570 salary that is £1,135.50 a year, which is deductible for Corporation Tax.

Updated for 2026/27. Uses UK corporation tax, dividend tax and PAYE assumptions. Estimates only — not tax advice.

Calculator checked against GOV.UK and HMRC rules on (how we check).

Calculate company tax Read the guides
15% employer NI rate£5,000 thresholdTrue company costTake-home trade-off
2026/27 tax year Company profit to personal take-home Salary plus dividends Retained cash shown

Limited company tax calculator

Company tax estimate

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Tax year 2026/27
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Enter profit before director salary, pension contributions and corporation tax.

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Annual profit used in calculations = monthly profit × 12.

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Amount you plan to withdraw from available post-tax company profit.

Selected dividends exceed available post-tax company profit.
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£47,749 personal take-home / year £3,979/mo
Personal take-home is based on salary and dividends withdrawn. Post-tax profit not withdrawn is retained company cash.
Monthly net
£3,979
Total tax
£18,450
Effective rate
24.6%
Personal take-home£47,749
Dividend tax£4,821
Employer NI£1,136
Corporation tax£12,493
Company pension£0
Retained company cash£8,801
Show detailed breakdown ▼
Director salary£12,570.00
Employer National Insurance£1,135.50
Corporation tax£12,493.04
Salary income tax£0.00
Employee National Insurance£0.00
Dividend tax£4,821.25
Retained company cash£8,801.46
Personal take-home£47,748.75
Effective tax rate24.60%
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HMRC 2026/27 · Methodology

Updated for 2026/27. Written and reviewed by James Whitfield against current GOV.UK and HMRC guidance · Editorial standards · Methodology. Estimates for planning only — not tax, accounting or financial advice.

Figures reviewed for the 2026/27 tax year. Source: GOV.UK.

About this calculator

Employer NI calculator for directors 2026/27: what it covers

This calculator focuses on the employer's National Insurance a limited company pays on a director's salary. Employer (secondary) National Insurance is charged at 15% on salary above the £5,000 secondary threshold. It is a company cost, entirely separate from the employee National Insurance and income tax the director pays personally.

This is why a salary of £12,570, chosen to use the full Personal Allowance, still triggers some employer National Insurance: the £5,000 secondary threshold is lower than the £12,570 the director is paid, so 15% applies to the slice between the two. Many single-director companies accept this small charge because the salary remains a deductible business expense.

The Employment Allowance, which can offset up to £10,500 of employer National Insurance, is generally not available to a company whose only employee is a single director. That exclusion is why the employer National Insurance on a sole director's salary usually cannot be wiped out, and it is a key reason directors weigh salary level against the resulting company cost.

Worked example

Employer NI on a £12,570 director salary

Employer National Insurance is charged only on the slice of salary above the £5,000 secondary threshold. On the popular £12,570 salary that means 15% applies to just £7,570:

Director salary £12,570
Secondary (employer NI) threshold £5,000
Salary above the threshold £7,570
Employer NI at 15% £1,135.50
Employer NI if salary were £5,000 £0
Net cost after 19% corporation tax relief ≈£920

A single-director company generally cannot claim the £10,500 Employment Allowance, so this £1,135.50 stands. But because employer NI is itself a deductible expense, its true cost after corporation tax relief is nearer £920 — small enough that most directors still prefer the £12,570 salary for the Personal Allowance it uses.

How it works

How employer NI on a director is worked out

  1. Directors use an annual earnings period: NI is worked out on total pay for the tax year, not pay period by pay period, so the threshold is £5,000 for the year however the salary is paid.2
  2. Employer (secondary) NI is 15% on everything above that threshold. There is no upper limit for employer NI.1
  3. A director appointed during the tax year gets a shorter earnings period with thresholds reduced in proportion to the weeks left.2
  4. Deduct the Employment Allowance if the company qualifies, up to £10,500 a year.3
  5. Employer NI is a deductible cost, so its real cost is reduced by the Corporation Tax it saves.
More worked examples

Two directors on £12,570 each

A husband-and-wife company, both directors, both paid £12,570.

Employer NI before the allowance £2,271.00
Employment Allowance claimed £2,271.00
Employer NI paid £0

Because more than one person is paid above the secondary threshold, the company is not a single-director company for the allowance, so the whole charge is covered. With only one director on the payroll it would not be.5

A higher salary: £30,000

A director who wants a bigger payslip, in a single-director company that cannot claim the allowance.

Employer NI (15% of £25,000) £3,750.00
Employee NI (8% above £12,570) £1,394.40
Income tax on the salary £3,486.00
Total NI on this salary £5,144.40

Above £12,570 both NI charges apply at once. That is the main reason most directors stop the salary at £12,570 and take the rest as dividends.

Mistakes and edge cases

Employer NI mistakes

Claiming Employment Allowance as a sole director
If the only person paid above £5,000 is a director, the company cannot claim, even if it has other staff paid less.
Using monthly thresholds
Ordinary payroll checks each pay period, but directors are assessed on the year. Payroll software has a director setting for this; make sure it is ticked.
Forgetting Class 1A
Benefits in kind, such as a company car, carry employer NI as well (Class 1A), reported on the P11D. This calculator covers salary only.
Leaving it out of the salary decision
The £1,135.50 of employer NI on a £12,570 salary is a real cost, but the £7,570 slice above £5,000 and its NI together save £1,654.05 of Corporation Tax at 19%. Leave employer NI out and the salary decision looks better than it is; leave the tax saving out and it looks worse.
By salary

Employer NI at common director salaries

Employer NI is 15% of salary above £5,000, worked out on the year as a whole. Employment Allowance is not deducted here, because a company whose only employee is a sole director cannot claim it.

Annual salaryEmployer NIEmployee NIIncome tax
£5,000£0.00£0.00£0.00
£6,708£256.20£0.00£0.00
£9,100£615.00£0.00£0.00
£12,570£1,135.50£0.00£0.00
£20,000£2,250.00£594.40£1,486.00
£30,000£3,750.00£1,394.40£3,486.00
£50,270£6,790.50£3,016.00£7,540.00

With a second person on the payroll above the secondary threshold, the allowance can offset up to £10,500 of employer NI.

Key figures

  • Employer National Insurance is 15% above £5,000 a year for 2026/27 and 2027/28. Budget 2026 Annex A
  • The Personal Allowance is £12,570 and the higher-rate threshold £50,270 for 2026/27 and 2027/28 (rest of the UK). Budget 2026 Annex A

Checked 30 October 2026.

Common questions

Employer NI calculator for directors 2026/27 — FAQs

How is employer National Insurance calculated on a director's salary?
Employer National Insurance is charged at 15% on the part of the salary above the £5,000 secondary threshold. On a £12,570 salary, that means 15% applies to the £7,570 above the threshold. The charge is paid by the company, not deducted from the director's pay.
Why does a £12,570 salary still create an employer NI bill?
The £12,570 salary level is chosen to match the Personal Allowance and avoid income tax, but the employer National Insurance secondary threshold is only £5,000. Because the salary sits above that threshold, the company pays 15% on the difference. This is a deliberate trade-off: the salary is still a deductible cost that reduces corporation tax.
Can a single-director company claim the Employment Allowance?
Generally no. A company whose only employee earning above the secondary threshold is a single director does not qualify for the Employment Allowance. This means the £10,500 offset that other employers use to reduce their employer National Insurance is usually not available, so the charge on the director's salary stands.
Does employer National Insurance reduce corporation tax?
Yes. Employer National Insurance is a deductible business expense, so it reduces the company's taxable profit and therefore its corporation tax bill. The net cost of the employer National Insurance is lower than the headline amount once that corporation tax saving is taken into account.
Sources & references

Where these figures come from

The rates and rules on this page are drawn from the official UK government sources below, using the confirmed 2026/27 figures. Each link opens the relevant HMRC, GOV.UK or Companies House page in a new tab.

  1. Rates and thresholds for employers 2026 to 2027 www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027
  2. CA44: National Insurance for company directors www.gov.uk/government/publications/ca44-national-insurance-for-company-directors
  3. Employment Allowance www.gov.uk/claim-employment-allowance
  4. National Insurance rates and categories www.gov.uk/national-insurance-rates-letters
  5. Single director companies and Employment Allowance www.gov.uk/government/publications/employment-allowance-more-detailed-guidance/single-director-companies-and-employment-allowance-further-employer-guidance
Verified against published UK government guidance.
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Practical guides

Limited company guides

Limited Company Tax in Scotland 2026/27: Salary, Dividends and Corporation Tax
In Scotland, corporation tax is the same 19%–25% as the rest of the UK and dividends are taxed at the UK rates of 10.75%, 35.75% and 39.35%. Only a director's salary uses Scottish income tax bands. 2026/27 examples.
Corporation Tax Rates 2026/27: 19%, 25% and Marginal Relief
Corporation tax rates 2026/27: 19% on profits up to £50,000, 25% over £250,000, marginal relief between (26.5% marginal rate). £100,000 profit pays £22,750. Table and examples.
Optimal Salary and Dividend Split for Directors 2026/27
How to calculate the tax-efficient salary and dividend combination for a limited company director in 2026/27, covering corporation tax, income tax, NI and the dividend allowance.
Salary vs Dividends 2026/27: The Optimal Split for Company Directors
The tax-efficient salary vs dividends split for UK company directors in 2026/27: a £12,570 salary, then dividends taxed at 10.75%. Corporation tax, the £500 dividend allowance, employer NI and a full worked example extracting £50,000.
Director's Loan Account 2026/27: s455 at 35.75%, 30-Day Rule
Overdrawn director's loan account in 2026/27: s455 at 35.75% if not repaid 9 months and 1 day after year end, refundable later; £10,000 benefit-in-kind limit; 30-day rule.
Limited Company Allowable Expenses: A Practical Guide 2026/27
What a limited company can legitimately deduct as business expenses, reducing corporation tax. Covers running costs, director expenses, travel, equipment, and home office claims.
Getting set up

Business bank accounts

A limited company must keep its finances separate from personal accounts. These accounts are free to open.

Starling Business
Permanently free, no monthly fee. A fully licensed UK bank - eligible deposits are FSCS protected up to £120,000 per eligible depositor, per authorised bank (brands sharing one banking licence share one limit). A limited company's account is protected separately from your personal accounts. Accepts limited companies and sole traders. 0.7% on Post Office cash deposits.
Open an account →
Tide
Free to open. Built-in invoicing and expense tracking. 20p per outgoing transfer on the free tier (Tide Plus is £9.99/month). Funds are safeguarded as e-money, not FSCS protected. Usually has a new-account offer.
Open an account →
Mettle by NatWest
Free. Single-director limited companies only (max two owners, one account user). Includes FreeAgent bookkeeping at no extra cost. Funds are safeguarded as e-money, not FSCS protected. No cash deposits.
Open an account →
Registering at Companies House

Companies House now charges £100 to register a limited company online (up from £50 in February 2026). Same-day registration is £156, through software filing only (for example via a formation agent). You can register directly at gov.uk or through a formation agent.