National Insurance contributions (NICs) grant methodology:

Introduction

This document sets out the methodology for the National Insurance contributions (NICs) grant. This includes guidance on how we will allocate funding for the 12 month period April 2025 to March 2026.  

We are providing schools and high needs settings with over £930 million in financial year 2025 to 2026 to support them with their increased NICs costs. We are also providing £25 million in respect of schools with early years provision and £155 million for post-16 schools and academies and further education colleges. Taken together, this is an increase of over £1 billion in financial year 2025 to 2026.  

The funding provided through the grant will be to support settings with NICs costs relating to both teachers and support staff, as they are both affected by the increase to NICs.

This funding is being split between mainstream schools, special schools and alternative provision (AP), local authority centrally employed teachers (CETs) (including support staff), early years (EY) settings, and post-16 settings. The split reflects relative pupil and place numbers, and core funding amounts, across these different types of provision.  

This guide explains how we will allocate the funding for mainstream schools (for the 5 to 16-year-old age range), CETs and EY settings in 2025 to 2026. The funding for mainstream schools, CETs and EY will be allocated through a new  NICs grant.   

In advance of the allocations being published, schools can use a calculator tool to estimate their funding for 5 to 16-year-olds through the NICs grant.

The NICs funding for specialist high needs settings, including AP, is being allocated through the core schools budget grant (CSBG) for 2025 to 2026.. We have published details on the funding methodology for these settings.

Link to full guide