National Insurance Contributions 2025: Employer Guide

National Insurance contributions come in two parts that employers must manage. Employee NI is deducted from the employee's gross pay before they receive it — similar to income tax. Employer NI is an additional cost paid by the business on top of the employee's gross salary. Both are reported to HMRC through RTI.

The April 2025 Budget increased employer NI significantly. The rate rose from 13.8% to 15%, and the secondary threshold — the point above which employer NI is charged — dropped from £9,100 to £5,000 per year. For a business paying ten employees at the National Living Wage, this represents a material increase in payroll cost. The Employment Allowance, which offsets employer NI for eligible businesses, increased to £10,500.

Mellow calculates employer NI automatically based on current rates and thresholds. The payroll dashboard shows your employer NI liability for each period and the cumulative annual figure. If you are eligible for the Employment Allowance, Mellow applies it until the allowance is exhausted. You do not need to track the offset manually.