Preparing for payroll shifts following The Autumn Budget

payroll.jpg.jpg

We are fast approaching a new payroll landscape shaped by the Autumn Budget 2024. The significant changes will have a big impact on employers across the UK.

What are the key changes?
Coming into effect from 6 April 2025, changes to National Insurance Contributions (NIC)

  • A reduction in the Secondary NIC Threshold for employers’ contributions. The Secondary Threshold (“ST”) is the earnings level before the amount paid to an employee is subject to Class 1 Employers NIC.  Since 06 April 2022, this has been £9,100 per year (or £758 per month). From April 2025, this will be reduced to £5,000 (or £416 per month).
  • An increase in the Employer's NIC rate. Currently, Employer's National Insurance Contributions are paid on 13.8% of earnings above the secondary threshold. From 06 April 2024, this will be increasing to 15%. These changes will also impact the amount of Class 1A & Class 1B paid on benefits in kind and PAYE Settlement Agreements (PSA), respectively.
  • Employment Allowance eligibility. Currently, companies are eligible to claim the employment allowance if:

-            They are registered as an employer (either as a sole trader, partnership or limited company)

-            At least one employee is paid above the secondary threshold

-            Where a limited company employs only directors, at least two directors must earn above the secondary threshold

-            Employers in a group can only claim Employment Allowance on one company

-            The Employers Class 1 NIC liabilities for the group must be less than £100,000 in the previous year.

From April 2025, the employment allowance eligibility criteria will change. Employers with Class 1 NIC of over £100,000 in the previous year can offset their NIC expenses.

  • Increase in the Employment Allowance. Since 06 April 2014, employers have been able to reclaim a proportion of the employer's NIC costs using the Employment Allowance. From 06 April 2025, this will increase from £5,000 to £10,500 offering a higher level of NIC relief.
  • Increase in the National Minimum Wage (NMW) From 1 April 2025.
    The Low Pay Commission (LPC) made recommendations to the government on what the increases to the National Minimum Wage should be from 01 April 2025.  On 29 October 2024, the government announced that it had accepted these recommendations.

 

 NLW 21 and over18 to 2016-17ApprenticeAccommodation offset
As of April 2024£11.44£8.60£6.40£6.40£9.99
From 1 April 2025£12.21£10.00£7.55£7.55£10.66


How will these changes impact employers?

  • The reduction in the secondary NIC threshold means employers will incur National Insurance contributions on a larger portion of employee earnings. This change will lead to higher payroll costs, particularly for businesses with a large workforce earning close to the threshold.
  • The Employment Allowance Adjustments will provide relief to smaller businesses as the eligibility is expanding however larger businesses will experience increased expenses as they do not qualify.  
  • The National Minimum Wage increase will further raise payroll costs for employers namely those in sectors with a high proportion of minimum wage workers, for example, retail, hospitality and care services.

The above-mentioned added financial pressures will result in businesses assessing their hiring strategies, revising budgets and may consider adjustments to their workforce.

At Pierce, we have developed a comprehensive tailored report that estimates the potential financial impact of these new regulations.

The key benefits of this report:

  • Detailed cost analysis specific to your business.
  • Strategic insights to help you prepare for the changes.
  • Actionable recommendations to mitigate potential increases in costs.

If you would like to receive your personalised report or discuss the upcoming changes, contact our payroll team on 01254 688110.

In addition, we are hosting a payroll event that you may find beneficial.

Enjoyed this? Read more from Pierce CA Ltd

Latest news

1

Velocity seals Airbus extension worth up to $54m Velocity Composites Has Announced Its Entry Into The Us Market

Velocity seals Airbus extension worth up to $54m

08 Oct 2025

2

First speakers confirmed for Lancashire Business Day Dave Walker with Richard Slater at Lancashire Business Day

First speakers confirmed for Lancashire Business Day

08 Oct 2025

3

Hemmings steps down as PNE chairman as hunt begins for new investors Craig Hemmings

Hemmings steps down as PNE chairman as hunt begins for new investors

08 Oct 2025

4

Chamber calls for three council county Lancashire County Council County Hall

Chamber calls for three council county

08 Oct 2025

5

Victorian Plumbing reports strong financial performance Victorian Plumbing Leyland

Victorian Plumbing reports strong financial performance

07 Oct 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

Empowering Franchise Growth in the North West
Empowering Franchise Growth in the North West event
LBV Hub Seminars
09 Oct 2025 - 09 Oct 2025

Empowering Franchise Growth in the North West

Forbes Solicitors, Sceptre Way, Walton Summit Centre, PR5 6AW, PR6 6AW

08:00 - 10:00

Empowering franchise growth in the North West
TFA Event - Empowering Franchise Growth.jpg.jpg
LBV Hub Seminars
09 Oct 2025 - 09 Oct 2025

Empowering franchise growth in the North West

Forbes Solicitors Sceptre Way Walton Summit Centre , Preston, PR5 6AW

08:00 - 10:00

Advantage: AI – A Workshop for Business Leaders – Oct 10th
Ai 10.10.png.png
LBV Hub Seminars
10 Oct 2025 - 10 Oct 2025

Advantage: AI – A Workshop for Business Leaders – Oct 10th

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

09:00 - 12:00

Unlocking major project opportunities in the North West
Lancs-cham-logo.jpg.jpg
LBV Hub Seminars
15 Oct 2025 - 15 Oct 2025

Unlocking major project opportunities in the North West

Strathmore Hotel, Morecambe, LA4 5AP

08:00 - 10:00

The New Employee Rights Landscape: Day One Compliance Essentials
EventBrite NORi - 15th Oct 2025 Webinar.png.png
LBV Hub Webinar
15 Oct 2025 - 15 Oct 2025

The New Employee Rights Landscape: Day One Compliance Essentials

Microsoft Teams, Microsoft Teams, PR253XH

13:30 - 15:00

The Autumn Re set - pour me a wine
LBV Advert_Autumn Reset 1200 x 630px.png.png
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

The Autumn Re set - pour me a wine

The Artistry House , Preston , PR1 3JJ

17:30 - 19:30

The Business Network Central & East Lancashire
LBV Header (26).png.png
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

The Business Network Central & East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

October Freelancer Meet-Up
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

October Freelancer Meet-Up

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Women scaling up Blackpool Fylde and Wyre
LBV Hub Seminars
22 Oct 2025 - 09 Jan 2026

Women scaling up Blackpool Fylde and Wyre

The Small Business Academy, Blackpool, FY4 5JX

09:30 - 15:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV124 Online Graphic
Subscribe now

Weekly news bulletin