Employers National Insurance – Autumn Budget 2024

What Does This Mean For Employers?

Highlights

• Employers National Insurance increased to 15% (from 13.8%)
• Employers National Insurance Threshold decreased to £5,000 (from £9,100)
• Employment Allowance increased to £10,500 (from £5,000)

Less Than 50 Words

A huge increase in Employers NIC, but many small employers will not pay any more if they are eligible for the employment allowance.

Full Story

Employers National Insurance is an extra cost to employers on salaries paid to employees. It is not deducted from wages.

Now

Currently employers pay 13.8% Employers National Insurance on each employee’s earnings over £9,100 per annum (example below):

Salary – £25,000

Employers NIC (£25,000 – £9,100) x 13.8% = £2,194.20

From April

Employers will pay 15% Employers National Insurance on each employee’s earnings over £5,000 per annum (example below):

Salary – £25,000

Employers NIC (£25,000 – £5,000) x 15% = £3,000.00.

Employment Allowance

This is an allowance which currently means the first £5,000 of Employers NIC is not payable. From April this will rise to £10,500. The increase in employment allowance will offset the Employers NIC increase for most small employers.

Generally most small and medium sized companies are eligible for the employment allowance unless they are a 1 Director only payroll with no other employees.

What Next?

If you are unsure how your business will be impacted by these changes please contact ryan@sapphireaccountants.co.uk to arrange a review.

In due course we will advise Company Directors of the most efficient remuneration structure in advance of the new tax year commencing April 2025.