As March comes to an end, it’s time to prepare for some major changes that will apply to your payroll from 6 April 2025. The UK government recently made an announcement regarding rises in the National Minimum Wage (NMW) as well as alterations to Employer National Insurance (NI) Contributions. It is important to recognise these changes for effective financial planning and compliance.
National Minimum Wage Increase
The new minimum pay rates are:
| AGE | 21 & OVER | 18 To 20 | Under 18 |
| 2024/25 (CURRENT) | £11.44 | £8.60 | £6.40 |
| 2025/26 (NEW) ↑ | £12.21 | £10.00 | £7.55 |
All these increases are to assist workers as living expenses increase and will benefit over three million workers.
Employer National Insurance Contributions Changes
As of 6 April 2025, there are significant Employer National Insurance Contribution updates:
NI & TAX CALCULATION – 2025/26
| ANNUAL SALARY | MONTHLY SALARY | EMPLOYEE NI 2025/26 | EMPLOYER NI 2024/25 | EMPLOYER NI 2025/26 ↑ | TAX 2025/26 |
| £5,000.00 | £416.67 | £0.00 | £0.00 | £0.00 | £0.00 |
| £9,100.00 | £758.00 | £0.00 | £0.00 | £51.15 | £0.00 |
| £12,000.00 | £1,000.00 | £0.00 | £33.40 | £87.45 | £0.00 |
To Note:
- The rate of ‘Secondary Class 1 NICs’ will rise from 13.8% to 15% on the Secondary Threshold pay.
- Where employers start paying NICs will decrease from £9,100 to £5,000 per year.
- The Employment Allowance, which reduces employer NICs for eligible employers, is to increase from £5,000 to £10,500 a year and the £100,000 threshold for eligibility will be removed, to expand it to all eligible employers with employer NICs bills.
However, the single director company condition remains.
These adjustments are one of the government’s budget measures to increase tax income and are due to increase employers’ NIC liability, particularly for employers with low-paid workers.
For further details, please feel free to contact us.
0203 4688 788 info@npus.co.uk
You can also check the government’s official publications for your reference:
