Employers N.I. (Non-Directors)

This Overheads code records the cost of employers n.i. (non-directors) incurred in running the business. As an expense account, it normally carries a debit balance: debit entries increase the balance (recording new costs) and credit entries decrease it (for example, correcting an error or a refund received).

Real-world examples

Retail/hospitality — many lower-paid staff

A retail business with a large number of part-time staff paid close to the secondary NI threshold has a relatively low employer NI bill per head, even with a sizeable headcount — a monthly charge of £1,450 debited to 7006 (Employers N.I. (Non-Directors)) and credited to 1200 (Bank Current Account) or a PAYE/NI control account. Many small and medium employers can also offset employer NI against the Employment Allowance up to its annual limit, further reducing what actually gets paid over.

Manufacturing/professional services — fewer, higher-paid staff

A manufacturing or professional services firm with fewer but better-paid employees sees a higher employer NI charge per head, since NI is charged on earnings above the threshold rather than a flat amount per employee — a £5,200 monthly charge on a much smaller headcount than the retail example above. There's no VAT on any of this; the entry is simply a debit to 7006 and a credit to 1200 or a payroll liability account.

Commonly confused with

Because code 7005 (Wages — Casual) sits right next to this one in Overheads, it's a common mis-posting target. Code 7006 is specifically for employers n.i. (non-directors), while 7005 covers wages — casual — similar in nature, but keeping them separate is what makes the overheads section of your management accounts meaningful rather than a single lumped total.

What a mis-posting here costs you

An error posting to Employers N.I. (Non-Directors) won't change total overhead spend, but it will distort the overheads breakdown that's usually reviewed line by line each month to spot cost creep.

Other codes in Overheads