Employer NI Savings Calculator — 2025-26 Tax Year
The April 2025 employer National Insurance changes represent the biggest increase in employment costs in a generation. Our free calculator helps you model the impact on your organisation and identify salary sacrifice savings to offset the rise.
Employer NI Calculator
Model organisation-wide NI savings across multiple benefit types with the new 2025-26 rates.
Calculate employer savings →Employee Calculator
Show employees how salary sacrifice benefits them too — calculate personal tax and NI savings.
Calculate employee savings →What changed in April 2025?
The Autumn Budget 2024 announced three significant changes to employer National Insurance, all taking effect from 6 April 2025:
- Rate increase: Employer NI rose from 13.8% to 15% — a 1.2 percentage point increase applied to every pound of salary above the threshold
- Threshold reduction: The secondary threshold (the point at which employer NI starts) dropped from £9,100 to £5,000 per employee per year — pulling an additional £4,100 of salary per employee into the NI net
- Employment Allowance doubled: To partially offset the impact on smaller employers, the Employment Allowance rose from £5,000 to £10,500, and the previous £100,000 NI bill eligibility cap was removed
How much more will employers pay?
The combined effect of the rate increase and threshold reduction is substantial. For an employee earning £35,000, the annual employer NI cost increased by approximately £900 compared to 2024-25. For a workforce of 50 employees at average salary, the total additional cost could exceed £45,000 per year — even after the increased Employment Allowance.
Our employer calculator models the exact impact for your specific workforce profile, taking into account the Employment Allowance, varying salary levels, and multiple employee groups.
Using salary sacrifice to offset the NI increase
Salary sacrifice remains the most effective, fully legal method for employers to reduce their NI liability. When an employee agrees to a contractual salary reduction in exchange for a qualifying benefit, the employer pays NI on the reduced salary rather than the original figure.
At the new 15% rate, the employer NI saving per pound sacrificed is higher than ever. For every £1,000 of salary sacrificed per employee, the employer saves £150 in NI — compared to £138 under the old rate. Across a workforce of 200 employees, even modest salary sacrifice participation can generate tens of thousands of pounds in annual NI savings.
Which salary sacrifice benefits deliver the biggest employer NI savings?
All qualifying salary sacrifice arrangements deliver the same employer NI saving per pound sacrificed (15%). However, participation rates and average sacrifice amounts vary by benefit type:
- Pension contributions — Typically the highest-value sacrifice per employee. Average sacrifice of £2,000–£5,000 per year. Often achieves 60–80% workforce participation.
- Electric car schemes — High individual sacrifice amounts (£4,000–£8,000 per year) but lower participation rates. Growing rapidly as EV adoption increases.
- Cycle-to-work schemes — Lower per-employee sacrifice (£500–£2,000 spread over 12 months) but straightforward to implement and popular with staff.
- Holiday trading — Flexible and cost-neutral for the employer. Buying additional leave generates NI savings; selling leave increases NI liability.
Employment Allowance: who benefits?
The doubling of the Employment Allowance to £10,500 is welcome, but it primarily helps smaller employers. For organisations with an employer NI bill exceeding £10,500 (roughly those with 4 or more employees at average salary), the allowance covers only a fraction of the total liability.
Crucially, the Employment Allowance does not reduce the marginal benefit of salary sacrifice. Whether or not your organisation claims the allowance, every pound of salary sacrifice still saves 15p in employer NI. Our calculator factors in the Employment Allowance to give you an accurate net position.
Modelling your organisation's savings
The most effective approach is to model savings across multiple benefit types and employee groups. Our employer NI calculator lets you:
- Enter multiple employee groups with different salary levels
- Model multiple salary sacrifice benefits simultaneously
- Compare 2024-25 and 2025-26 tax year figures side by side
- Factor in the Employment Allowance
- Generate a professional report for board or finance presentations
Read our full analysis: What the April 2025 Employer NI Changes Mean for Your Business.
Frequently asked questions
How much will employer NI increase in 2025-26?
From April 2025, the employer NI rate rises from 13.8% to 15%, and the secondary threshold drops from £9,100 to £5,000 per employee. This means employers pay NI on a larger portion of each employee's salary at a higher rate — significantly increasing employment costs for most organisations.
How can employers reduce their NI bill after the April 2025 changes?
Salary sacrifice is the most effective legal method. When an employee sacrifices part of their gross salary for a qualifying benefit (pension, EV car, cycle to work), employer NI is calculated on the reduced salary. At the new 15% rate, every £1,000 sacrificed saves the employer £150 in NI contributions.
What is the Employment Allowance for 2025-26?
The Employment Allowance has been doubled to £10,500 for 2025-26, up from £5,000 in 2024-25. This allowance offsets your employer NI liability directly. Importantly, the previous £100,000 employer NI threshold for eligibility has been removed, so more businesses can now claim it.
How much can a typical employer save through salary sacrifice?
Savings vary by workforce size and sacrifice amounts. An employer with 100 employees each sacrificing £3,000 per year for pension contributions would save approximately £45,000 per year in employer NI at the 2025-26 rate of 15%. Our employer calculator models these savings across multiple benefit types simultaneously.
Does the employer NI saving apply to all salary sacrifice benefits?
Yes. Employer NI savings apply to all HMRC-approved salary sacrifice arrangements, including pension contributions, cycle-to-work schemes, ultra-low emission vehicle leases, and childcare vouchers (for existing members). The employer saves 15% NI on every pound of gross salary sacrificed, regardless of the benefit type.
Model your employer NI savings now
Free calculator with current 2025-26 rates, Employment Allowance, and multi-benefit modelling.