In addition NLW/NMW increases changes, there are significant changes affecting Employers’ National Insurance Contributions (NICs) from 6th April 2025:-
- Employer NIC (Secondary Class 1) will increase from 13.8% to 15% for employees earning £5,000 per annum (or £416.67 monthly).
The threshold, at which point at which employers start paying NICs, will decrease from £9,100 to £5,000 per year; - The Employment Allowance, which can be deducted from the employer’s NIC bill, will increase from £5,000 to £10,500 (allowance is only applicable across one group company and can only be used to offset employer national insurance due).
Worked Example
For an employee earning £35,000 per annum, employer will incur an additional annual NIC cost of £925.80 as detailed below.
Before April 6, 2025:
- Threshold: £9,100
- Earnings above threshold: £35,000 – £9,100 = £25,900
- NIC Rate: 13.8%
- Employer NIC: £25,900 × 13.8% = £3,574.20
After April 6, 2025:
- Threshold: £5,000
- Earnings above threshold: £35,000 – £5,000 = £30,000
- NIC Rate: 15%
- Employer NIC: £30,000 × 15% = £4,500
