Changes to Payroll
Here at Lewis & Co, our clients that employ people are facing up to a couple of changes to their payroll. From 1 April 2025, the National Living Way (NLW) for those aged 21 or over will rise from £11.44 per hour to £12.21, while there are also increases to the rates that apply to workers aged 18 to 20 (£10) and under 18s and apprentices (£7.55).
In addition, there are increases in Employer’s National Insurance Contributions (ERNIC) from 6 April 2025. These are twofold, the rate of ERNIC will rise from 13.8% to 15%, and the Secondary Threshold – the level of pay above which ERNIC applies – will fall from £9,100 to £5,000.
These changes could well leave some employers struggling and less inclined to take on new team members or increase salaries. They may instead contract with self-employed people although, at the same time, HMRC is cracking down on ‘disguised employment’ (through IR35). If you are worried about how the IR35 regulations work, then do get in touch.
While ERNIC has risen, the Labour administration has pledged not to reverse the reduction in the main rate of Employees’ Class 1 NIC announced by the previous Government (Chancellor Jeremy Hunt cut it to 8% from 6 April 2024).
If you’ve got any questions concerning your payroll, call us on: 01892 513515.