Page 39 - P4304.1-V110 PSUK Mag June 2025

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SAS

Employers’ NIC increases from April 2025: What does it mean for you?

By Team Specialist Accounting Solutions.

Employers will have seen an increase in National Insurance contributions (NICs),
adding extra costs to payroll. From April 2025, the rate of employers’ NICs rose
from 13.8% to 15%, alongside a reduction in the secondary threshold at which
NICs become payable – dropping from £9,100 to £5,000 per year.

These changes mean practices will pay more in employment taxes, with many
employers needing to adjust budgets and staffing strategies accordingly.

What does this mean for practices?
The increase in NICs impacts practices and dispensaries of all sizes, raising
employment costs for every salaried worker. For example, an employee earning
£40,000 a year previously attracted an employer NIC cost of around £4,264.
Since April 2025, this has risen to approximately £5,250 – an additional £986 per
employee.
The effects are becoming more pronounced for smaller businesses, especially
where payroll budgets are already tight. The Federation of Small Businesses (FSB)
previously warned that rising employment costs could lead to reduced hiring and
wage stagnation, particularly among SMEs.

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