Smart Formations

The starting point for employer National Insurance has moved significantly in recent years.

For 2025/26 the employer Secondary Threshold is:

👉 £5,000 per year
👉 £417 per month

At the same time, the conditions under which a company may become eligible for Employment Allowance have also changed.

This combination can impact how director-owners structure payroll — particularly in family-run or small operational businesses.

🚨 Around 4.2 million UK businesses are run solely by the owner-manager.

In the right circumstances, even very small companies may be able to access the £10,500 Employment Allowance.

That can mean:

✔ employer’s National Insurance on a director salary of around £12,570 — eliminated
✔ or even nil employer’s NI on much higher salary strategies (in some cases up to around £75,000)

The trigger can be surprisingly practical.

Where a spouse or civil partner takes on genuine paid duties in the business — and earns more than about £96 per week (£5,000 a year) — the numbers can start to change.

For many small family companies, how everyday administrative work is organised can influence the overall tax position.

Small structural decisions.
Real financial impact.