The Autumn 2024 Budget has unveiled significant changes to Employers’ National Insurance Contributions (NIC), set to take effect from April 2025. These adjustments will result in substantial cost increases for many businesses. Here’s what’s on the horizon:
- Employers’ NIC Rate Increase: Rising from 13.8% to 15%.
- Lower Secondary Threshold: Dropping from £9,100 to £5,000.
- National Minimum Wage: A 6.7% increase for over-21s, effective April 2026.
While the Employment Allowance increase (from £5,000 to £10,500) and the removal of the £100,000 Class 1 NIC restriction may provide relief for some, many employers will still face rising costs.
The Impact in Numbers
Annual Pay Bill | ERNIC 2024–25 | ERNIC 2025–26 | Increase in Cost (£) | Increase in Cost (%) |
£325,000 | £30,963 | £40,414 | £9,451 | 30.52% |
£1,000,000 | £111,000 | £136,000 | £25,000 | 22.52% |
£4,300,000 | £462,000 | £573,000 | £111,000 | 24.03% |
Don’t Get Caught Off Guard
These changes could significantly impact your payroll costs, and there’s a risk of underestimating the challenge. However, you don’t have to face these changes unprepared. By taking proactive steps, you can manage and mitigate the effects on your business.
Take Action Now
- Cost Forecasting: Plan strategically to understand and manage the financial impact. Read more here.
- Salary Sacrifice Strategies: Explore opportunities to optimise costs without compromising employee benefits. Read our guide on Salary Sacrifice here.
Stay ahead of the curve—contact us today to explore solutions tailored to your business needs.
Get in touch
These changes could significantly impact your payroll costs, and there’s a risk of underestimating the challenge. However, you don’t have to face these changes unprepared. By taking proactive steps, you can manage and mitigate the effects on your business.