Class 1 NI Thresholds 2026/27
Class 1 National Insurance applies to employed earners and their employers. All figures below are annual unless otherwise stated.
| Threshold | Annual | Monthly | Weekly |
|---|---|---|---|
| Lower Earnings Limit (LEL) | £6,708 | £559 | £129 |
| Primary Threshold (PT) — employee NI starts | £12,570 | £1,048 | £242 |
| Secondary Threshold (ST) — employer NI starts | £5,000 | £417 | £96 |
| Upper Earnings Limit (UEL) | £50,270 | £4,189 | £967 |
| Upper Secondary Threshold (UST) — under 21 employer NI ends | £50,270 | £4,189 | £967 |
| Apprentice Upper Secondary Threshold (AUST) | £50,270 | £4,189 | £967 |
Employee NI Rates 2026/27 (Class 1)
Employee NI is deducted from gross pay. The standard rates for Category A employees are:
| Earnings band | Rate |
|---|---|
| Below LEL (£6,708/yr) | 0% — no NI payable (earnings don't count toward NI record) |
| LEL to PT (£6,708–£12,570/yr) | 0% — NI record protected (zero-rate contributions) |
| PT to UEL (£12,570–£50,270/yr) | 8% |
| Above UEL (over £50,270/yr) | 2% |
Employer NI Rates 2026/27 (Class 1 Secondary)
Employer NI is an additional cost on top of gross pay — it is paid by the employer, not deducted from the employee.
| Earnings band | Standard (Cat A) | Under 21 (Cat M/H) |
|---|---|---|
| Below ST (£5,000/yr) | 0% | 0% |
| ST to UST (£5,000–£50,270/yr) | 15% | 0% |
| Above UST (over £50,270/yr) | 15% | 15% |
NI Category Letters Explained
The NI category letter determines which NI rate table applies to an employee. It is set in the payroll record and included in every FPS submission.
| Category | Who it applies to | Employee NI | Employer NI |
|---|---|---|---|
| A | Standard — most employees | 8% / 2% | 15% |
| B | Married women / widows with valid certificate of election | Reduced rate | 15% |
| C | Employees over State Pension age | 0% | 15% |
| F | Freeport — standard (in Freeport site) | 8% / 2% | 0% up to UEL |
| H | Apprentices under 25 | 8% / 2% | 0% up to AUST, 15% above |
| J | Employees deferring NI (more than one job) | Deferred rate (2%) | 15% |
| M | Employees under 21 | 8% / 2% | 0% up to UST, 15% above |
| V | Veterans (first year of civilian employment) | 8% / 2% | 0% up to UEL |
| Z | Under 21, deferring NI | Deferred rate (2%) | 0% up to UST, 15% above |
The most important categories for a typical bureau are A (standard), C (over State Pension age), H (apprentices under 25), and M (under 21). Always verify the category when onboarding a new employee — using the wrong category is one of the more common payroll errors flagged in HMRC enquiries.
Employment Allowance 2026/27
Employment Allowance lets eligible employers reduce their employer Class 1 NI liability by up to £10,500 per tax year (unchanged from 2025/26). The allowance is applied monthly across the year, not as a lump-sum rebate.
Eligibility
- Your total employer NI liability in the previous tax year was less than £100,000.
- You are not a public authority (with some exceptions).
- You are not a sole director company with no other employees.
- You are not a connected company that has already claimed the allowance.
How to claim
Submit an EPS with the Employment Allowance indicator set to Yes at the start of the tax year. The allowance is then applied automatically against your monthly employer NI bill until it is exhausted or the year ends. See the EPS guide for full submission instructions.
Student Loan Deductions 2026/27
Student loan repayments are deducted from gross pay above each plan's annual threshold at the rates below. Plan 5 is new from 2026/27 — it applies to graduates who started courses in England after August 2023.
| Plan | Annual threshold | Rate | Who it applies to |
|---|---|---|---|
| Plan 1 | £26,900 | 9% | Pre-Sept 2012 starters (England/Wales); all Scottish/NI loans |
| Plan 2 | £29,385 | 9% | Post-Sept 2012 English/Welsh starters before Aug 2023 |
| Plan 4 | £33,795 | 9% | Scottish post-Sept 2012 starters |
| Plan 5 | £25,000 | 9% | English/Welsh starters from August 2023 onwards — new this year |
| Postgraduate | £21,000 | 6% | Masters/Doctoral loans |
An employee can have more than one plan active simultaneously (e.g. Plan 2 + Postgraduate). Deduct each independently and report both in the FPS.
Statutory Sick Pay (SSP) 2026/27
The SSP weekly rate for 2026/27 is £123.25 (up from £116.75 in 2025/26). SSP is payable from the fourth qualifying day of illness; the first three are waiting days with no SSP due. The daily rate is the weekly rate divided by the number of qualifying days in the week (typically £24.65 for a 5-day week).
What Changed from 2025/26?
| Item | 2025/26 | 2026/27 | Change |
|---|---|---|---|
| Lower Earnings Limit (LEL) | £6,396/yr | £6,708/yr | +£312/yr |
| Employer NI rate | 15% | 15% | No change |
| Secondary Threshold (ST) | £5,000/yr | £5,000/yr | No change |
| Primary Threshold (PT) | £12,570/yr | £12,570/yr | No change (frozen) |
| Employment Allowance | £10,500 | £10,500 | No change |
| Employee NI rate (PT–UEL) | 8% | 8% | No change |
| Statutory Sick Pay | £116.75/wk | £123.25/wk | +£6.50/wk |
| Student Loan Plan 5 | Not applicable | £25,000 threshold, 9% | New — post-Aug 2023 starters |
2026/27 is a relatively stable year for NI — the main practical impact is the higher LEL (meaning slightly more earnings are brought into the NI record for low earners) and the introduction of Plan 5 for newer graduates. Employers who were already running payroll in 2025/26 should find this year straightforward to transition.
NI and Payroll Software
HMRC requires that NI contributions are calculated using the exact percentage method rather than rounding to the nearest pound. Payroll software applies this automatically. Each NI band (LEL to PT, PT to UEL, above UEL) is calculated separately and the contributions are summed — these band-level figures are reported in every FPS submission.