For the 2026/27 UK tax year, an employer pays a category A employee £2,000 in a single week. Under HMRC's Class 1 employer (secondary) National Insurance rules, which statement is correct?
- Employer National Insurance is charged at a flat 15% on earnings above the secondary threshold of £96 per week, with no upper earnings limit capping the rate as pay rises further
- Employer National Insurance stops being charged once weekly pay exceeds the Upper Earnings Limit of £967, mirroring the drop in the employee's own contribution rate
- Employer National Insurance is charged at the same tiered 8% and 2% rates that apply to employee contributions
- Employer National Insurance is only charged once weekly pay exceeds £242, the same Primary Threshold figure used for employee contributions
Why A? And why not the others?
Correct answer: A. Employer National Insurance is charged at a flat 15% on earnings above the secondary threshold of £96 per week, with no upper earnings limit capping the rate as pay rises further
Class 1 employer (secondary) National Insurance for 2026/27 uses its own, lower secondary threshold of £96 per week, above which employers pay a flat 15% with no upper limit at which the rate steps down, so on £2,000 of weekly pay the employer pays 15% on everything above £96, matching the first option. The option claiming employer contributions stop above the Upper Earnings Limit is wrong because the Upper Earnings Limit governs only where the employee's own rate drops from 8% to 2%; it has no equivalent ceiling for the employer's flat-rate charge, which keeps applying at 15% however high pay goes. The option applying the employee's tiered 8%/2% structure to the employer is wrong because employer contributions use a single flat rate above their own threshold, not a two-tier structure. The option using £242 as the employer's starting threshold is wrong because £242 per week is the employee's Primary Threshold; the employer's secondary threshold is the separate, lower figure of £96 per week.
Source: GOV.UK: Rates and thresholds for employers 2026 to 2027 — Class 1 National Insurance