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

Roundhouse secures approval for new £15m office and industrial scheme in Preston Momentum

Roundhouse secures approval for new £15m office and industrial scheme in Preston

25 Jul 2025

2

Homebuilder's high-performing sales advisers clinch awards Ben Garland and Julia Lorente

Homebuilder's high-performing sales advisers clinch awards

24 Jul 2025

3

Work is set to start on Multiversity project Multiversity Blackpool

Work is set to start on Multiversity project

24 Jul 2025

4

BAE Systems welcomes MOU between Republic of Turkiye and UK for purchase of Typhoon aircraft Typhoon production Warton

BAE Systems welcomes MOU between Republic of Turkiye and UK for purchase of Typhoon aircraft

23 Jul 2025

5

Assystem to double UK jobs to deliver Sizewell C EDF Assystem

Assystem to double UK jobs to deliver Sizewell C

22 Jul 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
Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

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

Preston Tech Connection: Buzz Word Bingo. Challenging Todays's Buzzwords In Tech
July PTC banner long updated.png.png
LBV Hub Networking
29 Jul 2025 - 29 Jul 2025

Preston Tech Connection: Buzz Word Bingo. Challenging Todays's Buzzwords In Tech

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 19:30

Preston Freelancer Meet-Up: July
Longer July Banner.jpg.jpg
LBV Hub Networking
31 Jul 2025 - 31 Jul 2025

Preston Freelancer Meet-Up: July

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Advantage: AI – A Workshop for Business Leaders – August 14th
Navy--Event Tile.png.png
LBV Hub Seminars
14 Aug 2025 - 14 Aug 2025

Advantage: AI – A Workshop for Business Leaders – August 14th

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

09:00 - 12:00

The Business Network Central & East Lancashire
LBV Header (24).png.png
LBV Hub Networking
21 Aug 2025 - 21 Aug 2025

The Business Network Central & East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

Morecambe Bay Walk
Walk.jpg.jpg
LBV Hub Awards
30 Aug 2025 - 30 Aug 2025

Morecambe Bay Walk

Arnside, CARNFORTH, LA5

09:30 - 14:00

Longridge Soap Box Derby
Screenshot 2025-06-10 090035.png.png
LBV Hub Fundraisers
14 Sep 2025 - 14 Sep 2025

Longridge Soap Box Derby

Berry Lane, Longridge, PR3 3WH

10:00 - 16:30

Cumbria Business Expo 2025
https---cdn.evbuc.com-images-880461633-4862066883-1-original.20241022-110415.jpeg.jpg
LBV Hub Exhibitions
19 Sep 2025 - 19 Sep 2025

Cumbria Business Expo 2025

Carlisle Racecourse, Carlisle, CA2 4TS

09:00 - 15:00

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

RISE - Lancashire's unique leadership programme for women
thumbnail_Emma Weston Illustration WENDY BOWERS RISE Illustrstion.jpg.jpg
LBV Hub Seminars
22 Oct 2025 - 18 Mar 2026

RISE - Lancashire's unique leadership programme for women

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

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 LBV 123 Online Graphic
Subscribe now

Weekly news bulletin