Employers N.I. & Employers Pensions Explained: Codes 7006 & 7007

An employee's gross pay isn't the full cost of employing them — the employer also has to pay its own share of National Insurance and, for most workers, a minimum pension contribution on top.

The codes, and what each one holds

Code 7006 — Employers N.I. (Non-Directors) records the employer's National Insurance contribution on regular staff pay — a genuine additional cost to the business, separate from the NI deducted from the employee's own pay.

Code 7007 — Employers Pensions records the employer's contribution to workplace pension schemes under auto-enrolment, currently a minimum of 3% of qualifying earnings for most employees. Both are Overheads codes and normally carry a debit balance.

A worked example

Say an employee earns £2,500 a month, triggering £180 of employer's National Insurance and a 3% employer pension contribution of £75 on qualifying earnings.

Employers N.I. (Non-Directors) (code 7006): £180 debited.

Employers Pensions (code 7007): £75 debited.

The true cost of employing this person for the month is £2,755, not just their £2,500 gross pay.

Why this matters day to day

These two costs are easy to overlook when budgeting for a new hire, since they don't appear on the employee's own payslip but still hit the business's bank account every month. Keeping them in their own codes rather than buried inside gross wages means the true, fully-loaded cost of the workforce is always visible when pricing work or planning for growth.