The Budget – the impact on employers

Today’s Budget announcement will impact employers in three main ways:

• The minimum wage will be increasing in April 2025 by 6.7% from £11.44 to £12.21 for those aged 21 and above and for those aged 18-20 there will be an increase of 16.3% from £8.60 to £10 an hour;
• National Insurance contributions for employers will also increase from 13.8% to 15% from April 2025; and
• The threshold at which businesses start paying NI on workers’ earnings will be lowered from £9,100 to £5,000. Smaller employers will get some relief with an increase in the employment allowance £5,000 to £10,500.

Immediate speculation centres around the potential impact of the increased NI costs on salary sacrifice arrangements if employers choose not to share the NI savings with employees. Concerns are also being expressed about the impact the NI increase will have on small businesses and umbrella companies. No doubt there will continue to be much more analysis over the coming days.

Please get in touch if you have any questions regarding the issues discussed in this article.

E: help@jma-hrlegal.co.uk / T: +44 (0)1252 821792