Employer National Insurance and Payroll Changes UK 2026/27: Small Business Checklist

Employer National Insurance is one of the biggest moving parts in your payroll cost base, and March is when small employers need the numbers locked in for April. The new tax year starts on 6 April 2026, while new National Minimum Wage rates start on 1 April 2026. If you run payroll for even a small team, you need clear calculations, an updated payroll calendar, and enough cash set aside before month end.

Most payroll mistakes in April are not caused by tricky tax law. They come from timing, old rates left in software, and rushed approvals. That is fixable.

Quick summary: confirm your 2026/27 Employer National Insurance settings, update wage rates from 1 April, stress test payroll cash flow for April and May, and diarise your final 2025/26 filing and P60 dates now.

If you want us to sense-check your payroll setup before April, we can help through our payroll services, bookkeeping service, and contact page.

Why this matters right now for UK small employers

Today is mid-March 2026, which means you are in the short gap between planning and execution. The key payroll dates are clustered:

• 1 April 2026: new National Minimum Wage and National Living Wage rates apply
• 5 April 2026: 2025/26 tax year ends
• 6 April 2026: 2026/27 tax year starts, payroll settings and thresholds need to be correct
• 19 April 2026: final FPS or EPS deadline for 2025/26
• 31 May 2026: P60 deadline for employees on payroll at 5 April

Those dates are close enough that leaving checks until “later in April” is risky. April payroll usually lands before you get breathing space.

The other practical issue is cash flow. In many businesses, wage updates, Employer National Insurance, pension contributions, and PAYE remittances all hit inside a tight window. If you only look at gross wages, you under-budget.

Employer National Insurance rates for 2026 to 2027

Let us pin down the figures first. HMRC has published the Class 1 National Insurance thresholds and rates for employers for the 2026/27 tax year.

Item	2026/27 figure	Notes
Employer (secondary) NIC rate	15%	Applied to earnings above the secondary threshold
Secondary threshold	GBP 96 per week (GBP 417 per month, GBP 5,000 per year)	Employer NIC starts above this level
Employee primary threshold	GBP 242 per week (GBP 1,048 per month, GBP 12,570 per year)	Useful for employee deductions planning
Upper earnings limit	GBP 967 per week (GBP 4,189 per month, GBP 50,270 per year)	Relevant for employee NIC bands
Employment Allowance (eligible employers)	GBP 10,500	Can reduce employer Class 1 NIC bill

Your payroll software should hold these automatically after updates, but do not assume. Check one sample employee manually.

Worth saying clearly, eligibility for Employment Allowance depends on your circumstances. If you are unsure whether your business qualifies, get that checked before relying on it in forecasts.

External source: Rates and thresholds for employers 2026 to 2027 (GOV.UK)

National Minimum Wage rates from 1 April 2026

Wage rates change before the tax year switch. That catches employers every year, because payroll teams often focus on 6 April and forget that wage compliance moves on 1 April.

The published rates from 1 April 2026 are:

Worker category	Rate from 1 April 2026
Age 21 and over (National Living Wage)	GBP 12.71 per hour
Age 18 to 20	GBP 10.00 per hour
Under 18	GBP 7.55 per hour
Apprentice	GBP 7.55 per hour
Accommodation offset	GBP 11.33 per day

If you use salary sacrifice, deductions for uniforms, or any arrangement that affects take-home pay, check minimum wage compliance carefully. It is one of those areas where rules can get fiddly quite quickly.

External source: National Minimum Wage and National Living Wage rates (GOV.UK)

Worked example 1: Employer National Insurance cost for one employee

Assume one employee earns GBP 30,000 per year, paid monthly, with no special NIC category and no Employment Allowance used in this isolated example.

For a rough annual Employer National Insurance estimate:

• annual earnings: GBP 30,000
• less secondary threshold: GBP 5,000
• employer NIC-able pay: GBP 25,000
• employer NIC at 15%: GBP 3,750

Approximate monthly Employer NIC cost: GBP 312.50.

Why this matters: many businesses budget for gross salary only. The real payroll cost here is salary plus employer NIC (and usually pension too), so the funding need is higher than the headline wage figure.

Your exact calculation can vary by pay frequency, NIC category, and any mid-year changes, so treat this as a planning illustration rather than personalised advice.

Worked example 2: impact of April 2026 wage increase

Assume a full-time team member works 37.5 hours per week and moves to the new National Living Wage from 1 April 2026.

If hourly rate rises by GBP 0.50 (for example, from GBP 12.21 to GBP 12.71), annual gross wage uplift is:

• 0.50 x 37.5 x 52 = GBP 975

Then add Employer National Insurance impact on most of that uplift:

• GBP 975 x 15% = GBP 146.25

So a single wage-rate uplift can add roughly GBP 1,121.25 per year before pension effects.

For a team of 8 people on similar hours, that is around GBP 8,970 extra annual cost before workplace pension increases.

That is why wage updates should be modelled in March, not discovered in April payroll approvals.

April and May payroll deadline checklist

Even when rates are right, missed filing dates can still create penalties and unnecessary admin.

Use this timeline for the next few weeks:

Date	Action	What to check
1 April 2026	apply new minimum wage rates	pay rates, contracts, overtime assumptions
5 April 2026	close 2025/26 tax year records	final reconciliation for year-end payroll
6 April 2026	run first 2026/27 payroll settings	NI thresholds, tax codes, pension bands
19 April 2026	file final FPS/EPS for 2025/26	final submission marker and totals
22 April 2026	electronic PAYE payment date for month	cash funding and payment confirmation
31 May 2026	issue P60s	all eligible employees receive documents

HMRC references:

• PAYE for employers: End-of-year tasks
• P60 forms and deadline guidance

If you have benefits and expenses reporting in scope, keep your July P11D and Class 1A timeline in the same calendar so it does not get parked and forgotten.

Worked example 3: monthly cash flow plan for a three-person team

Let us run a simple planning model for April payroll, because this is usually where the pressure shows.

Assume your monthly gross pay is:

• employee A: GBP 2,500
• employee B: GBP 2,100
• employee C: GBP 1,800
• total monthly gross pay: GBP 6,400

Approximate employer NIC calculation using monthly secondary threshold GBP 417 per employee:

• NIC-able pay A: 2,500 - 417 = 2,083
• NIC-able pay B: 2,100 - 417 = 1,683
• NIC-able pay C: 1,800 - 417 = 1,383
• total NIC-able pay: GBP 5,149
• employer NIC at 15%: GBP 772.35

If workplace pension employer contribution is 3% on qualifying earnings (illustrative only), your pension cost might sit in the low hundreds too.

So your monthly funding need could look like:

• gross wages: GBP 6,400
• employer NIC: about GBP 772
• employer pension: say GBP 150 to GBP 250 depending on scheme setup
• total employer payroll outlay: roughly GBP 7,322 to GBP 7,422 before other payroll-linked costs

A clear cash flow view avoids the common April issue where wages are paid, then PAYE liabilities land days later with not enough buffer left.

Common April payroll mistakes we are seeing

1) Updating rates but not testing one live payslip

Software update complete does not mean payroll is correct. Run one test employee from each pay category and check figures line by line.

2) Missing the 1 April wage date

Many businesses set all changes from 6 April out of habit. Minimum wage compliance starts from 1 April.

3) Treating Employment Allowance as guaranteed without checks

Employment Allowance can be very helpful, though eligibility still needs confirming.

4) No owner for the payroll calendar

Shared ownership often becomes no ownership. Put one named person on deadlines and one back-up person for leave cover.

5) Leaving P60 production until the final week of May

P60 work is easier when employee records are tidied early in April.

Practical setup steps for the next 14 days

Right, so what should you do this week, in order?

1. Export current payroll settings so you have a fallback record.
2. Update wage rates effective 1 April 2026 and check contracts where needed.
3. Check 2026/27 thresholds in software against HMRC published rates.
4. Run two manual spot checks for employer NIC and net pay.
5. Build an April to July deadline calendar with reminders and named owners.
6. Review payroll cash flow including PAYE payment timing and pension dates.
7. Schedule a short April post-run review after first live payroll.

This process sounds simple because it is simple. The value is doing it on time.

Where this links to wider tax planning

Payroll decisions sit inside broader business tax planning. If you are a director-shareholder business, your salary levels, dividend planning, and company pension contributions still need to fit together sensibly.

If you need help on that side, these pages are useful next reads:

• Year-end tax planning for limited company directors
• PAYE year-end checklist for final FPS, EPS and P60
• Bookkeeping service for cleaner monthly records
• Company accounts support

The better your bookkeeping quality is in March, the less firefighting you do in April.

FAQ: Employer National Insurance and April 2026 payroll changes

What is the Employer National Insurance rate for 2026/27?

For standard Class 1 secondary contributions, the published employer rate is 15% in 2026/27, applied to earnings above the secondary threshold.

What is the employer secondary threshold for 2026/27?

HMRC lists it as GBP 96 weekly, GBP 417 monthly, and GBP 5,000 annually for 2026/27.

When do National Minimum Wage changes apply in 2026?

The new rates apply from 1 April 2026, not from 6 April.

What is the P60 deadline for the 2025/26 tax year?

You must provide P60s to eligible employees by 31 May 2026.

Can Employment Allowance reduce my employer NIC bill?

Yes, eligible employers can claim Employment Allowance, and HMRC publishes the allowance amount and rules each year. Check eligibility before relying on it in budgets.

Is this enough to replace tailored payroll advice?

No. This is general guidance for planning and compliance awareness. Your payroll setup, staff profile, and tax position can change the result, so individual advice is still worth getting where risk is material.

Your next step this month

Block one hour in your diary this week to run your April payroll preflight. Check rates, test one payslip per pay group, and confirm who owns each deadline. Doing that now is usually the difference between a calm April and a very long one.