These changes include the increase in rate of employers’ national insurance from 13.8% to 15% and the reduction of the secondary threshold from the current level of £9,100 to £5,000. The table below highlights the impact of the reduction to the secondary threshold:
|
Pay Frequency |
Current Threshold |
Threshold from 6 April 2025 |
|
Weekly |
£175.00 |
£96.00 |
|
Monthly |
£758.00 |
£417.00 |
|
Annually |
£9,100.00 |
£5,000.00 |
Example Case
The employers’ national insurance cost for a monthly paid employee with an annual salary of £25,000 is currently £182.90 per month. From April 2025, the monthly cost for this employee will be £249.95. The difference is £67.05 per month, an annual increase of £804.60.
Employment Allowance
To support small businesses, the government have announced that the employment allowance will increase from £5,000 to £10,500 from April 2025. The £100,000 cap will also be removed meaning that businesses with an employer’s national insurance bill of more than £100,000 in the previous tax year will be eligible to claim employment allowance provided that all other criteria are met. The employment allowance is used to offset the cost of employer’s national insurance liabilities meaning that businesses eligible to claim the allowance will not begin to pay employer’s national insurance until their annual bill exceeds £10,500.
If you wish to discuss how these changes will affect your business, contact our Payroll Team at payroll@kilsbywilliams.com.
