Employer NI Exemptions and Reliefs 2026/27

In 2026/27 you can reduce employer NI through five main reliefs: the 0% rate for under-21s, apprentices under 25 and veterans, a 0% rate up to £25,000 at Freeports and Investment Zones, and the £10,500 Employment Allowance. Certain payments are also outside NI altogether. This page lists them all, shows what each is worth in pounds and explains how they combine.

In this guide16 sections

The reliefs at a glance

Relief	Who it covers	What you save
Under-21s (category M)	Employees under 21	No employer NI on pay up to £50,270
Apprentices under 25 (category H)	Approved apprentices	No employer NI on pay up to £50,270
Veterans (category V)	First 12 months of civilian employment	No employer NI on pay up to £50,270
Freeport and Investment Zone	Eligible new hires	No employer NI on pay up to £25,000
Employment Allowance	Eligible employers	Up to £10,500 off the yearly bill

How much each relief saves

Salary	Standard employer NI	Under 21, apprentice or veteran	Saving	Freeport	Saving
£20,000	£2,250	£0	£2,250	£0	£2,250
£35,000	£4,500	£0	£4,500	£1,500	£3,000
£50,270	£6,790.50	£0	£6,790.50	£3,790.50	£3,000
£60,000	£8,250	£1,459.50	£6,790.50	£5,250	£3,000

The maximum saving for each person on the £50,270 reliefs is £6,790.50 a year. For Freeport staff it is £3,000 less than that, at £3,000 a year.

Which relief should I look at first?

1. Do you employ anyone under 21? See employer NI for under-21s.
2. Do you have apprentices? See employer NI for apprentices.
3. Have you hired someone who left the armed forces? See veterans relief.
4. Do you operate in a Freeport or Investment Zone? See Freeport relief.
5. Are you eligible for the allowance? See Employment Allowance.

Can reliefs be combined?

Yes, in the sense that the 0% rate lowers the bill, and Employment Allowance then reduces what is left. An employee can only be in one relief category at a time. A 19-year-old apprentice, for example, is covered either by category M or H. The result is the same: 0% up to £50,270.

Payments that are outside NI

Some payments carry no employer NI at all:

• Employer pension contributions
• Approved expenses reimbursed at HMRC rates
• Trivial benefits up to £50 each
• Statutory redundancy and some termination pay up to £30,000
• An annual staff party up to £150 per head

Records you need

Relief	Keep
Under 21	Date of birth
Apprentice	Apprenticeship agreement and course details
Veteran	Proof of leaving date and service
Freeport	Proof of work location and hours
Employment Allowance	EPS submission and eligibility notes

Case study: a shop with five staff

Employee	Pay	Category	Employer NI
Manager	£26,000	A	£3,150
Assistant	£22,000	A	£2,550
Trainee, age 19	£20,000	M	£0
Apprentice, age 23	£18,000	H	£0
Veteran in first year	£30,000	V	£0
Total			£5,700

Without the reliefs the bill would be £13,650. With Employment Allowance, the shop pays £0 and leaves £4,800 of the allowance unused. If the shop grows and its bill passes £10,500, the 0% staff keep the bill lower than it would otherwise be.

A check for every new hire

1. Date of birth: under 21?
2. Apprenticeship: approved and under 25?
3. Armed forces: first civilian job in 12 months?
4. Work location: Freeport or Investment Zone?
5. Letter set and evidence saved?

Mistakes with reliefs

1. Leaving the relief on after the employee stops qualifying.
2. Not setting the relief at all, so you overpay.
3. Not keeping evidence. HMRC may ask for it in a check.
4. Forgetting that 15% applies above the limit.

Where to learn more

Go through each relief page in turn: under-21s, apprentices, veterans and Freeports. For the allowance, see Employment Allowance. For letters, see the category letters guide.

Building a relief plan for your team

Treat the reliefs as a yearly review rather than a one-off set-up. A simple routine takes under an hour for a small team.

1. List every employee with their date of birth, start date and pay.
2. Mark anyone under 21, any apprentice under 25 and any veteran in their first year.
3. Mark anyone who works at a Freeport or Investment Zone site.
4. Check the category letter in payroll for each one.
5. Total the employer NI, then apply Employment Allowance.
6. Diary the next date a letter has to change.

Which relief wins if more than one applies

Only one category letter can be used at a time. Pick the one with the higher 0% limit.

Employee profile	Options	Best choice
19-year-old apprentice	M or H	Either (both 0% to £50,270). H lasts longer
20-year-old at a Freeport	M or Freeport	M (limit £50,270)
Veteran under 25 on an apprenticeship	V or H	H lasts longer than 12 months
30-year-old at a Freeport	Freeport	Freeport (limit £25,000)

What a typical year of savings looks like

Team	Standard employer NI	With reliefs	Saving
2 under-21s on £22,000, 1 apprentice on £18,000, 3 standard staff on £30,000	£18,300	£11,250	£7,050

After Employment Allowance the same team pays £750. The reliefs matter most once your bill grows past the allowance.

Frequently asked questions

What employer NI reliefs are there?

There are four 0% rate categories (under-21s, apprentices, veterans and Freeport staff), plus Employment Allowance, and certain exempt payments.

How much can I save with one relief?

Up to £6,790.50 a year for each under-21, apprentice or veteran earning £50,270 or more.

Do I still pay the apprenticeship levy on relief categories?

Yes. The levy is based on pay bill, not on the NI rate.

Can I use Employment Allowance as well as 0% rate categories?

Yes. The allowance applies to the NI bill that remains.

Where can I find the letters?

The category letters guide lists them.

What if I use the wrong category?

You may owe NI with interest, or you may have overpaid. Correct it in payroll as soon as you spot it.

Which relief saves the most per person?

The 0% rate up to £50,270 for under-21s, apprentices and veterans. It saves up to £6,790.50 a year each.

Can a business use all the reliefs at once?

Yes, for different employees. Each employee fits one category at a time.

Are the reliefs automatic?

No. You apply them by setting the right category letter in payroll.

Related guides

• Employer NI for Under 21s (2026/27): 0% to £50,270
• Employer NI for Apprentices (2026/27): Category H
• Employer NI Veterans Relief (2026/27): Category V
• Freeport and Investment Zone Employer NI Relief
• Employment Allowance 2026/27: £10,500 Off Employer NI

Official sources

• National Insurance rates and categories
• Claim Employment Allowance