Employee National Insurance in 2026/27 — 8% main rate, 2% above the upper threshold

For the 2026/27 tax year, from 6 April 2026 to 5 April 2027, most category A employees pay Class 1 National Insurance at 8% on earnings above the primary threshold and up to the upper earnings limit, and 2% above that limit. The primary threshold is £242 a week, £1,048 a month, or £12,570 a year, while the upper earnings limit is £967 a week, £4,189 a month, or £50,270 a year. Nothing is due up to the primary threshold. That first slice of pay is protected in each pay period.

Employers pay separately: 15% for category A above the secondary threshold of £96 a week, £417 a month, or £5,000 a year. That charge does not come out of the employee's pay, but should be built into salary budgets and cash-flow forecasts. Eligible employers may also use Employment Allowance, subject to current rules.

The key point is that employee National Insurance is worked out pay period by pay period, not over the whole year. Each week or month stands alone. A bonus in one month can push that month's pay into the 2% band, while a month with no pay may attract none, even if annual totals look similar. There is no annual reconciliation for employees as there is for income tax, where cumulative earnings are reviewed over the year. So the same annual salary can produce different National Insurance if pay is spread differently across the year.

A worked example makes this clear. Take a steady £40,000 salary, below the £50,270 upper earnings limit, so only 8% applies to the employee. Deduct £12,570 from £40,000, leaving £27,430, and 8% of that is £2,194.40 for the year, about £182.87 a month on average. The employer pays 15% above the £5,000 secondary threshold: £35,000 times 15% is £5,250 a year before any Employment Allowance. Together, they show why total employment cost is well above salary alone.

Practical checks: confirm payroll software uses the 2026/27 thresholds, check category letters, especially for apprentices, employees under 21, and directors, whose treatment can differ, and review staff near the upper earnings limit, where the drop from 8% to 2% changes take-home pay. Employees should also check payslips after a bonus, overtime, or changed hours, because one large payment can change that period's deduction sharply.