PAYE employer National Insurance receipts increased by about £6.0 billion in the first five months of the UK financial year, accounting arithmetically for almost a quarter of the £24.9 billion increase in total HM Revenue & Customs receipts, Finance Gazette analysis of newly released tax data shows.
Employer PAYE NIC receipts reached £64.54 billion between April and August 2026, compared with £58.54 billion over the corresponding five months of 2025. The £6.01 billion difference represents an increase of about 10.3%, while employee PAYE NIC receipts increased at roughly half that rate, rising 5.2% from £20.48 billion to £21.54 billion.
The comparison provides a more detailed picture of the £391.6 billion collected by HMRC during April–August, but it comes with an important limitation. HMRC introduced a new monthly alignment process for Income Tax, NICs and VAT during 2026 and has explicitly cautioned that direct year-on-year comparisons involving those receipts should be interpreted carefully.
HMRC's headline figures show total tax and NIC receipts of £391.57 billion between April and August 2026, against £366.68 billion during the equivalent period a year earlier. That produces an underlying difference of £24.89 billion, which HMRC reports as a rounded £24.9 billion increase.
The underlying monthly dataset provides considerably more detail than that headline. Adding PAYE employer NIC receipts across the five months gives £64.54 billion for 2026, against £58.54 billion for 2025, producing a £6.01 billion difference. Dividing that increase by the £24.89 billion increase across all HMRC receipts gives approximately 24.1%.
Employee PAYE NIC receipts show a different pattern. They increased by £1.07 billion, from £20.48 billion to £21.54 billion, equivalent to about 5.2%. The increase recorded on the employer side was therefore more than five times the £1.07 billion increase in employee PAYE NIC receipts.
Those calculations do not mean employer NICs caused 24.1% of the overall increase in government revenue. They show that the change in this particular cash-receipts sub-series is equivalent to roughly that proportion of the change in HMRC's total receipts.
HMRC's published bulletin combines Income Tax, Capital Gains Tax and NICs in one of its principal headline categories. Receipts from those sources totalled £230.9 billion between April and August, £16.6 billion more than during the corresponding period last year.
PAYE Income Tax and NIC receipts together reached £214.0 billion, an increase of £16.9 billion. Breaking those aggregates into their underlying components shows that employer PAYE NICs accounted for £6.01 billion of the year-on-year difference, while employee PAYE NICs added £1.07 billion.
Income Tax itself remained a larger source of the overall increase. The underlying HMRC table shows Income Tax receipts of £141.89 billion for April–August, up £10.28 billion from £131.61 billion in the comparable period. PAYE Income Tax accounted for most of that difference, increasing £9.88 billion to £127.90 billion.
The figures therefore do not support treating employer NICs as the sole or even largest explanation for the increase in tax receipts. They do show that employer contributions represent a substantial identifiable component that is less visible in HMRC's combined Income Tax, Capital Gains Tax and NIC headline.
The difference between the two PAYE NIC components is particularly visible in their respective growth rates. Employer receipts increased 10.3% across the five-month comparison, while employee receipts increased 5.2%.
In cash terms, the £6.01 billion increase in employer PAYE NICs represented about 94.8% of the £6.34 billion increase in total National Insurance contributions recorded in HMRC's underlying table. Other NIC components and adjustments mean the individual PAYE series should not simply be added together and treated as the complete NIC total.
The comparison follows changes to employer National Insurance that took effect in April 2025. The main employer Class 1 NIC rate increased from 13.8% to 15%, while the annual Secondary Threshold was reduced from £9,100 to £5,000. The Employment Allowance was also increased to £10,500 and its previous £100,000 eligibility restriction was removed.
HMRC's bulletin notes that the employer Class 1 changes affect receipts from May 2025 onwards. The receipts data, however, do not isolate how much of the £6.01 billion difference is attributable to those measures rather than changes in employment, earnings, payroll composition, use of allowances or other factors affecting the tax base.
The latest month continued the difference visible in the cumulative figures. Total HMRC receipts were £68.89 billion in August 2026, compared with £63.05 billion in August 2025, an increase of approximately £5.83 billion.
Employer PAYE NIC receipts were £12.45 billion during August, against £11.40 billion a year earlier, giving a difference of approximately £1.05 billion. Employee PAYE NIC receipts increased by a smaller £290 million, from £3.98 billion to £4.27 billion.
The monthly comparison should not be interpreted as a direct measurement of economic activity during August. HMRC says the latest PAYE receipts largely relate to July liabilities, while the broader dataset records receipts on a cash basis according to when payments reach the department.
Using the cumulative five-month period therefore reduces the emphasis placed on movements in any individual month, although it does not eliminate the more important methodological comparability issue affecting the year-on-year series.
HMRC introduced monthly alignment of Income Tax, NIC and VAT receipts to its accounting data in August 2026 and retrospectively applied the process to receipts from April 2026 onwards. Corporation Tax was already subject to monthly alignment.
The change is intended to improve the quality and assurance of provisional monthly receipts, but it creates an important break when comparing the current financial year with earlier data. HMRC explicitly says that, during the first year of implementation, direct year-on-year comparisons for Income Tax, NICs and VAT should be interpreted with caution.
The effect has already been material. When HMRC introduced the alignment in its July bulletin, it said previously published Income Tax and NIC receipts for April–June 2026 were revised down by £2.5 billion, while VAT was revised down by £0.6 billion, partly reflecting correction of a previously published VAT error.
The current April–August figures consequently represent HMRC's latest data vintage rather than the figures originally published during the opening months of the financial year. Receipts from April 2026 onwards also remain provisional and can be revised again before final annual alignment following HMRC's 2026/27 annual report and accounts.
HMRC's headline £24.9 billion increase spans several major sources of revenue and comes against a period of elevated UK inflation. Income Tax receipts increased £10.28 billion in the underlying data, VAT increased £3.82 billion to £80.64 billion, and Corporation Tax increased approximately £2.86 billion to £32.24 billion.
Employer PAYE NICs contributed another £6.01 billion when the current April–August series is compared with the equivalent five months of 2025. That increase is considerably larger than the £1.07 billion difference recorded for employee PAYE NICs and is equivalent to about 24.1% of the increase across all HMRC receipts.
The calculation does not establish that employer NIC policy changes generated £6.01 billion of additional revenue, nor does HMRC's methodology permit the year-on-year percentage to be treated as a perfectly like-for-like measure of underlying growth. What it establishes more narrowly is that, in HMRC's current cash-receipts dataset, employer PAYE National Insurance accounts for almost a quarter of the arithmetic increase in total receipts during the first five months of 2026/27.
