Forces employer National Insurance bill nears one billion

Employer National Insurance contributions for Armed Forces personnel rose from about £721 million in 2023-24 to about £765 million in 2024-25 and about £978 million in the following year, according to figures given to Parliament.

Mike Wood, the Conservative MP for Kingswinford and South Staffordshire, asked for the total cost in each year from 2023-24. Calvin Bailey, the Minister for Veterans and People, said: “The table below shows employer National Insurance contributions for Armed Forces personnel, excluding employees’ contributions, in each financial year from 2023-24.” The table lists the £978 million against a year labelled 2026-26, followed by about £518 million for 2026-27.

The figure for the year labelled 2026-26 is about 28 per cent higher than the 2024-25 total. Employer National Insurance rose to 15 per cent from April 2025, with contributions due on earnings above £5,000, following the October 2024 Budget.

Before the changes, employers paid National Insurance at a rate of 13.8 per cent on annual earnings above £9,100. The increase to 15 per cent was accompanied by a reduction in the secondary earnings threshold to £5,000, extending the proportion of earnings subject to employer contributions.

The changes took effect on 6 April 2025 under the National Insurance Contributions (Secondary Class 1 Contributions) Act 2025 and apply to public and private sector employers.

Employer National Insurance is paid separately from contributions deducted from employees’ salaries and forms part of the overall cost of employing Armed Forces personnel. The Ministry of Defence accounts for these payments alongside other personnel expenditure, including salaries and pension-related costs.