{"id":28066,"date":"2025-03-06T14:55:04","date_gmt":"2025-03-06T14:55:04","guid":{"rendered":"https:\/\/smh.group\/?p=28066"},"modified":"2025-03-06T14:55:04","modified_gmt":"2025-03-06T14:55:04","slug":"how-to-prepare-for-the-increase-in-employer-nics","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/how-to-prepare-for-the-increase-in-employer-nics\/","title":{"rendered":"How to prepare for the increase in employer NICs"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The government has previously announced changes to employer National Insurance contributions (NICs), which will take effect from 6th April 2025. These changes will increase employment costs, particularly due to a reduction in the Secondary Threshold, meaning businesses will pay National Insurance on a greater portion of employees&#8217; earnings.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While this reform is expected to generate additional revenue for public services, it will also impact business budgets, particularly for sectors with large or lower-paid workforces. Below, we outline the key changes, their implications, and how employers can prepare.<\/span><\/p>\n<h2><b>Key Changes to Employer NICs<\/b><\/h2>\n<h4><b>Increased NIC rate<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">From April 2025, the employer NIC rate will rise from 13.8% to 15%.<\/span><\/p>\n<h4><b>Lower Secondary Threshold \u2013 a major cost impact<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">The Secondary Threshold, the point at which employers start paying NICs on an employee\u2019s earnings, will drop from \u00a39,100 per year to \u00a35,000 per year.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This is a key factor driving higher costs, as more of each employee\u2019s wages will now be subject to employer NICs.<\/span><\/li>\n<\/ul>\n<h4><b>Rising payroll costs for businesses<\/b><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Employers will face higher payroll expenses, especially those with larger workforces.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Sectors such as retail, hospitality, and social care, which typically employ lower-paid workers, will be particularly affected.<\/span><\/li>\n<\/ul>\n<h4><b>Salary sacrifice as a cost management tool<\/b><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Salary sacrifice schemes are not impacted by this change but remain a useful tool for managing payroll costs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Employers may consider expanding these schemes to help offset some of the increased NIC burden.<\/span><\/li>\n<\/ul>\n<h2><b>Implications for businesses<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">These changes will result in:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Higher employment costs \u2013 Payroll budgets will need adjusting as NIC costs increase.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Potential hiring slowdowns \u2013 Some businesses may reconsider recruitment or expansion plans.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Workforce strategy adjustments \u2013 Employers may need to review salary structures and benefits to manage costs effectively.<\/span><\/li>\n<\/ul>\n<h2><b>How can employers prepare?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">If your business will be affected by the employer NIC rise, here\u2019s how you can plan ahead:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Review payroll costs \u2013 Assess the financial impact and adjust budgets accordingly.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Explore salary sacrifice schemes \u2013 These can help reduce employer NIC costs and benefit employees.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Factor changes into workforce planning \u2013 Consider how the additional costs affect hiring decisions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Seek professional advice \u2013 Our payroll specialists at SMH Group can help you navigate these changes and identify cost-saving strategies.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The rise in employer NICs will bring new financial pressures, but with careful planning, businesses can navigate these changes effectively.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For advice on managing the impact of rising National Insurance costs, contact SMH Group on 0114 266 4432 or email <\/span><a href=\"mailto:info@smh.group\"><span style=\"font-weight: 400;\">info@smh.group<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The government has previously announced changes to employer National Insurance contributions (NICs), which will take effect from 6th April 2025. These changes will increase employment costs, particularly due to a reduction in the Secondary Threshold, meaning businesses will pay National Insurance on a greater portion of employees&#8217; earnings. While this reform is expected to generate additional revenue for public services, it will also impact business budgets, particularly for sectors with large or lower-paid workforces. Below, we outline the key changes, their implications, and how employers can prepare. Key Changes to Employer NICs Increased NIC rate From April 2025, the employer NIC rate will rise from 13.8% to 15%. Lower Secondary Threshold \u2013 a major cost impact The Secondary Threshold, the point at which employers start paying NICs on an employee\u2019s earnings, will drop from \u00a39,100 per year to \u00a35,000 per year. This is a key factor driving higher costs, as more of each employee\u2019s wages will now be subject to employer NICs. Rising payroll costs for businesses Employers will face higher payroll expenses, especially those with larger workforces. Sectors such as retail, hospitality, and social care, which typically employ lower-paid workers, will be particularly affected. Salary sacrifice as a cost [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":28067,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-28066","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-smh-accounting-business-advisory"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to prepare for the increase in employer NICs - SMH Group<\/title>\n<meta name=\"description\" content=\"The government has previously announced changes to employer National Insurance contributions (NICs), which will take effect from April 2025.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to prepare for the increase in employer NICs - 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