At the 2024 Autumn Budget, changes surrounding employers national insurance were announced. For most employers this will lead to additional tax due:
- The increase in employers national insurance from 15% from 13.8%
- The reduction of the threshold of when tax starts to £5,000 from £9,100 creating a minimum tax charge of £615 on virtually all employees
- The employers allowance increases to £10,500 from £5,000.
The increase in employers allowance means that an employer can have an additional amount of wages of £36,667 without having an increased employers national insurance bill.
Not all employers can claim the employers allowance and those employer that were under the £100,000 employers threshold could now lose their employers allowance sooner than they would have thought. If you have a connected company this could also impact the ability to claim the employers allowance.
Ensuring your employees are on a salary sacrifice scheme for pensions can help mitigate this additional tax that employers will face.
Despite the mitigation percentage wise this disproportionally increases tax on the lowest earners as can be shown in the table below:
|
Annual Salary £ |
24/25 Employers NI £ | 25/26 Employers NI £ | £ Increase |
% Increase |
|
10,000 |
124.20 | 750 | 625.80 | 6.26% |
|
25,000 |
2,194.20 |
3,000 |
805.80 |
3.22% |
|
37,500 |
3,919.20 |
4,875 |
955.80 |
2.55% |
|
50,000 |
5,644.20 |
6,750 |
1,105.80 |
2.21% |
|
75,000 |
9,094.20 |
10,500 |
1,405.80 |
1.87% |
|
100,000 |
12,544.20 | 14,250 | 1,705.80 |
1.71% |
Assistance
Please feel free to contact us if you need assistance with your payroll, a member of our team will be happy to help.
