November 2024 - Autumn Budget

Now that the dust has settled following the first Budget from a Labour Chancellor in more than 14 years, it’s time for Employers to take stock and calculate the fine detail of what this means to them and to know what their responsibilities are.

One of the biggest changes to impact Employers is the increase in Employer National Insurance Contributions which sees contributions increase from their current rate of 13.8% to 15.0% with effect from April 2025.

In addition, the earnings threshold at which Employers start paying NIC will drop from £9,100 to £5,000

What could this mean to your payroll costs?

Imagine you have 15 employees each earning £30,000.00 per year.

• Under current legislation Employers NIC costs at a rate of 13.8% with a £9,100 threshold would total £43,263
• From April 2025, under the new NIC costs (15% rate with £5,000 threshold) would see an Employers NIC costs raise to £56,250

This is a major change, and Employers will need to plan for this increase in costs as early as possible.

The top rate of the National Minimum Wage will increase to £12.21 per hour payable to all staff aged 21 years and over, this is an increase from the current rate of £11.44

18–20-year-olds will see an increase from £8.60 to £10.00 per hour

This government initiative allows eligible employers to reduce their National Insurance liability each time the payroll is run until the allowance has been used or the tax year ends (whichever is sooner).

The current annual allowance of £5,000 is set to increase from April 2025 to £10,500.00 and see the removal of the current eligibility threshold of £100,000