Daily briefing

Employer National Insurance: The Hidden Payroll Tax

Employees focus on income tax and employee National Insurance on their payslip. Employers pay a separate NI bill on wages — a stealth cost that affects hiring, pay rises, and prices.

When employer NI rates or thresholds change, businesses often respond by limiting pay rises, reducing headcount, or passing costs through to customers.

The April 2025 employer NI changes increased the cost of employment for many firms — especially in labour-intensive sectors such as retail, care, and hospitality.