Post-16 National Insurance contributions grant methodology: April 2025 to March 2026
Updated 23 April 2025
Applies to England
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This publication is available at https://www.gov.uk/government/publications/post-16-national-insurance-contributions-nics-grant/post-16-national-insurance-contributions-grant-methodology-april-2025-to-march-2026
1. Introduction
This guide explains how we will allocate the funding for post-16 provision for financial year 2025 to 2026.
To support institutions with the increase to employers’ National Insurance contributions (NICs) arising from their post-16 education from April 2025, we are providing up to £155 million in financial year 2025 to 2026.
We are allocating additional funding for:
- pre-16 provision through the National Insurance contributions grant
- high needs settings through the Core schools budget grant (CSBG) 2025 to 2026 for special schools, special post-16 institutions and alternative provision
2. Eligibility for the grant
2.1 Mainstream settings
The post-16 NICs grant will provide additional funding for the following mainstream settings that receive annual funding allocations from Department for Education (DfE) for the provision of post-16 education:
- maintained school and academy sixth forms
- 16 to 19 academies
- 16 to 19 schools
- further education (FE) colleges
- sixth-form colleges
- designated institutions (including the new designated institutions that form part of higher education provider group structures)
- local authorities
3. Paying the grant
We will pay the NICs grant for the period from April 2025 to March 2026. There will be one payment to cover the period and we expect to pay this in September 2025.
We will pay funding:
- for maintained schools to local authorities, who will be required to pay it to individual schools at the allocated amount
- at the allocated amount directly to all other settings
4. Allocation calculation
There are 3 components to the grant. You will only receive the components that apply to your situation.
4.1 Component 1 - all settings delivering 16 to 19 provision
Step 1
We will calculate the total amount of income across all settings. We will use the total amount of 16 to 19 programme funding for academic year 2024 to 2025 funding allocations as the income for this calculation.
Step 2
We will calculate your percentage share of the total income across all settings.
Step 3
We calculate your funding by applying the percentage share to the total amount of post-16 NICs funding for 16 to 19 delivery.
Example
In table 1 there are 10 institutions, a total income amount of £100,000 and a total amount of funding of £250,000.
These figures are for representative purposes only to explain the calculation.
Table 1
| Income received | Percentage of total income received (100/£100,000 multiplied by income received) |
Grant allocation (£250,000 multiplied by percentage of total income received) |
|
|---|---|---|---|
| Institution A | £10,000 | 10 | £25,000 |
| Institution B | £15,000 | 15 | £37,500 |
| Institution C | £25,000 | 25 | £62,500 |
| Institution D | £3,000 | 3 | £7,500 |
| Institution E | £7,000 | 7 | £17,500 |
| Institution F | £5,000 | 5 | £12,500 |
| Institution G | £5,000 | 5 | £12,500 |
| Institution H | £8,000 | 8 | £20,000 |
| Institution I | £2,000 | 2 | £5,000 |
| Institution J | £20,000 | 20 | £50,000 |
| £100,000 | 100 | £250,000 |
4.2 Component 2 - colleges delivering non 16 to 19-year-old activity
We will allocate funding to colleges based on how much they earned from delivering further education to non 16 to 19 funded students and apprentices in proportion to their share of college income for these activities in 2023 to 2024.
Step 1
We will use the figure from your 2023 to 2024 financial statement to calculate the total amount of non 16 to 19-year-old income for colleges. For the few colleges that have not returned 2023 to 2024 financial statements, we will use your 2023 to 2024 forecast.
This will include the following total income:
- 14 to 16 year olds in FE
- apprenticeship
- adult education and training
- higher education
- European funding
- skills bootcamps
- other income from provision of education and training, excluding income from bursaries - net income (5% admin fee, advanced learner loans bursary and free meals) and the teachers’ pension scheme employer contributions grant
- funding support
Step 2
We will calculate your percentage share of the total income across all settings.
Step 3
We calculate your funding by applying the percentage share to the amount of non 16 to 19-year-old and apprenticeship activity.
Table 1 shows an example of the calculation.
4.3 Component 3 - centrally employed teachers
The NICs grant will provide additional funding in respect of local authority centrally employed teachers (CETs) and centrally employed support staff.
Step 1
We will use data collected on local authorities’ headcounts and salary costs of their CET and support staff usage in adult education over academic year 2023 to 2024. From this, we will calculate a separate average salary for 6 staff categories: full-time, part-time and other contracted staff for each centrally employed teachers and centrally employed support staff, respectively.
Step 2
We will use the average salary calculation to estimate the NICs costs for each of these categories and allocate funding to each local authority based on their estimated NICs cost.
Step 3
Where the estimated NICs cost in a staff category equates to less than 2% of a local authority’s salary bill in that category, and the calculated average salary is less than £9,100, we will uplift the funding for that category to 2% of the local authority’s salary costs.
Calculating allocations without headcount and salary data
There are a small number of cases where we have not received the data return shown in step 1 from local authorities. We do have the headcount numbers from their 2022 to 2023 FE Workforce Census return.
In these cases, we will use their headcount figures from their census return and apply the median salary costs for each category gathered through the data we’ve collected from all other local authorities. After this, we will calculate their allocation following steps 2 and 3 detailed above.
5. Allocations
We aim to publish allocations in May. We will publish the grant allocations for:
- components 1 and 2 at institution level
- component 3 at local authority level
6. Contact us
If you have any questions after reading this guidance, please contact us via our customer help portal.