Understanding National Insurance
National Insurance is a UK-wide tax on earnings that funds the State Pension, NHS, and welfare benefits. Both employees and employers pay NI, though at different rates and thresholds. Employee NI is deducted from your pay, while employer NI is an additional cost to your employer on top of your salary.
Employee vs Employer NI
For Category A employees in 2025-26, employee NI is charged at 8% on earnings between £12,570 and £50,270, and 2% above £50,270. Employer NI is charged at 13.8% on all earnings above £9,100, with no upper cap. This makes employer NI significantly more expensive, especially for higher earners.
Frequently Asked Questions
What NI category am I?â–¾
Most employees are Category A. Category B applies to married women with a reduced rate election. Category C is for those over State Pension age. Categories H and M apply to apprentices under 25 and employees under 21 respectively — they do not pay NI on earnings up to £50,270.
Does NI stop when I reach pension age?â–¾
Yes. Once you reach State Pension age, you stop paying employee NI (you move to Category C). However, your employer continues to pay employer NI on your earnings at the standard 13.8% rate.
Can salary sacrifice reduce my NI?â–¾
Yes. Salary sacrifice reduces your gross pay, which reduces both employee and employer NI. This is one of the key advantages over personal pension contributions, which only reduce income tax. Both you and your employer save NI on the sacrificed amount.
Calclypso Editorial Team
NI calculations verified against HMRC 2025-26 rates. Last updated: April 2026. This calculator is for estimation purposes only.