Employer National Insurance
Class 1 secondary National Insurance paid by the umbrella company at 15% above the £5,000 annual secondary threshold. Deducted from the assignment rate.
Employer National Insurance (Class 1 secondary NI) is a payroll tax paid by employers on top of employee wages. In 2026/27 the rate is 15% on earnings above the secondary threshold of £5,000/year.
For umbrella contractors, the employer NI is paid by the umbrella company — but the cost is passed on by being deducted from the assignment rate before gross salary is calculated. This is legal and standard practice, disclosed in your Key Information Document.
On a £500/day rate (£120,000 annual assignment), employer NI costs approximately £17,250/year — the single largest pre-gross deduction.
The rate was raised from 13.8% to 15% and the threshold was cut from £9,100 to £5,000 in April 2025. These remain unchanged in 2026/27.