JonYou don't pay employer National Insurance on an apprentice aged under 25, on earnings up to £50,270 a year. Normally you'd pay 15% on everything above £5,000. For a full-time apprentice aged 21 to 24 on the National Living Wage, that's a saving of up to £2,968 a year.
There are two important details most guides leave out, though: who actually gains from this relief, and whether your business pays employer NI in the first place. This guide covers both, using the HMRC rates for the 2026 to 2027 tax year.
The 2026/27 rates
|
|
Standard employee |
Apprentice under 25 |
|---|---|---|
|
Employer NI rate |
15% |
0% |
|
Paid on earnings above |
£5,000 a year |
£50,270 a year |
|
Payroll category letter |
A |
H |
Above £50,270, the normal 15% applies to the extra. The apprentice still pays their own employee National Insurance as usual. The relief only removes the employer's share.
The detail most people miss: under-21s already pay 0%
Employers already pay 0% NI on all staff aged under 21, apprentice or not, up to the same £50,270 limit. So putting a 19-year-old on an apprenticeship doesn't change your NI bill.
The real NI saving comes from apprentices aged 21 to 24. Without the apprenticeship you'd pay 15% on their earnings above £5,000. As an apprentice, you pay nothing on earnings up to £50,270.
Worked examples for an apprentice aged 21 to 24
|
Annual salary |
Employer NI as a standard employee |
As an apprentice |
Saving per year |
|---|---|---|---|
|
£24,785 (full-time on the £12.71 National Living Wage) |
£2,968 |
£0 |
£2,968 |
|
£30,000 |
£3,750 |
£0 |
£3,750 |
|
£40,000 |
£5,250 |
£0 |
£5,250 |
|
£50,270 |
£6,790 |
£0 |
£6,790 |
Calculated as 15% of salary above £5,000. Full-time means 37.5 hours a week for 52 weeks. The saving lasts for as long as they're an apprentice and under 25, which on a 12 to 18 month AI apprenticeship can mean two tax years.
Check this before you count the saving: Employment Allowance
Many small employers can claim Employment Allowance, which knocks up to £10,500 a year off their employer NI bill in 2026/27. If your whole NI bill is already wiped out by it, the apprentice relief doesn't put extra cash in your pocket this year.
The relief becomes real money when your employer NI bill is bigger than the allowance, which is usually the case once you have more than a handful of staff on decent salaries, or if you can't claim the allowance at all. Your payroll provider can tell you which applies to you in a couple of minutes.
How to claim it
There's no form to fill in. Your payroll software applies the 0% rate when you give the apprentice National Insurance category letter H. You'll need to keep their apprenticeship agreement on file as evidence that they're on an approved apprenticeship.
The bigger picture
For most small businesses, the NI relief is the bonus rather than the headline. The bigger numbers are the training itself, worth up to £18,000 per person and 100% funded for apprentices aged 16 to 24 at non-levy employers, plus the new £2,000 hiring payment for new recruits aged 16 to 24. Our guide Is AI training free for employers? explains the funding in full.
Want the figures for your own team? Try the funding calculator, or request a free AI Opportunity Report and we'll set out your training value, costs and NI position in writing.
Quick answers
Do employers pay National Insurance on apprentices? Not on apprentices aged under 25, on earnings up to £50,270 a year. Above that, 15% applies to the extra.
What NI category letter is an apprentice under 25? Category H.
Is there NI relief for apprentices aged 25 or over? No. Standard employer NI applies, although the training is still 95% funded for non-levy employers.
Sources
This guide is general information, not tax advice. Check your own position with your accountant or payroll provider.