Understanding Employer National Insurance in Brixx

When planning staff costs in Brixx, it's important to account not just for salaries but also for the additional costs employers are legally required to pay.

In the UK this is called Employer National Insurance (NI), but Brixx provides a feature that allows you to automatically calculate and include such contributions no matter which country you're modeling a plan for.

What Is Employer National Insurance?

This is a tax paid by businesses on the salaries they pay to their employees. It is separate from taxes which are deducted from an employee's salary, and it represents an additional cost to the employer.

This contribution is based on how much each employee earns.

When building a financial forecast in Brixx, it is important to include Employer NI to accurately reflect your total staffing costs.

How Employer NI Is Calculated in Brixx

Brixx provides a straightforward mechanism to apply Employer NI contributions to salaries entered in Employee components. The feature works by using three key values:

Monthly Threshold – This is the level of monthly earnings at which the Employer NI rate changes.
Lower Rate – Applied to employee salaries below or equal to the threshold.
Higher Rate – Applied only to the portion of the salary that exceeds the threshold.

This system allows you to reflect real-world rules where contributions are charged only above a certain level of income.

Example Calculation:

Assume the following settings:

Monthly Threshold: £758
Lower Rate: 0%
Higher Rate: 13.8%

If an employee earns £700 per month, no Employer NI would be charged, as the salary is below the threshold.

If an employee earns £1,000 per month:

The first £758 is exempt (0%)
The remaining £242 is charged at 13.8%, resulting in an Employer NI cost of £33.40 for that month.

This additional cost is then included automatically in the employee's total cost in reports and charts throughout Brixx.

How to Set Up Employer NI in Brixx

To enable and configure Employer NI contributions in your plan:

Open your plan in Brixx.
Navigate to the Settings tab at the top of the screen.
Select the Finance Settings sub-tab.
Scroll to the Employer National Insurance Settings section.
Here, you can:
- Enter your desired Monthly Threshold.
- Specify the Low Rate and High Rate percentages.

Once enabled, these settings will automatically apply to all Employee components in the plan.

You can update these values at any time to reflect changes in legislation or your own assumptions about future NI contributions.

Where Employer NI Costs Appear

When Employer NI is enabled, the resulting costs are included in the Employee component's forecast data, and contribute to:

Employee Costs Paid in the Cash Flow Report
Total employee costs in the Reports section

This ensures that the additional employer costs are visible and factored into your overall business plan.

Limitations of NI Modelling in Brixx

While Brixx provides a helpful tool for estimating Employer NI costs, it does not currently support all variations and exemptions. The following are not implemented in Brixx:

Category-based thresholds: No support for special cases who may have different NI rules.
Employment Allowance: Brixx does not currently support the Employment Allowance, whichallows eligible employers to reduce their NI bill.
NI rebate schemes or reliefs: Special NI reliefs available to certain sectors or employee types must be modelled manually.

If your business benefits from these schemes or if you have more complex NI arrangements, you can still represent them in Brixx. This is done by adding custom Operational Cost components to reflect the real cost or savings, outside of the automatic Employer NI system.

When to Use Custom Components Instead

You might consider modelling Employer NI manually if:

You have employees eligible for exemptions
You want to reflect the Employment Allowance (e.g., reducing Employer NI up to £5,000 per year)
You apply a flat rate NI contribution across all staff as part of a simplified or average-cost approach

In these cases, you can:

Create a separate Operational Cost component named “Employer NI”
Enter your forecasted monthly or yearly Employer NI costs directly