In the Autumn Budget of 2024 the Chancellor announced a number of changes that will affect payroll calculations for the tax year 2025-26 onwards. There was nothing in the recent budget that will affect payroll calculations in tax year 2024-25.
Changes from April 2025 include:
- An increase to the rate of Employer National Insurance Contributions (NICs) from the current rate of 13.8% to 15% from April 2025 (the rate of Employee NICs will remain unchanged).
- A lowering of the threshold at which Employer NICs become due (the ‘Secondary Threshold’) from the current threshold of £9,100 to £5,000 from April 2025.
- An increase to the ‘Employment Allowance‘ from the current level of £5,000 to £10,500 from April 2025, and also the removal of the £100,000 upper threshold for qualification for the the Employment Allowance.
- An increase to the various National Minimum Wage rates from April 2025.
Each of these changes will be implemented via a scheduled Payroll Manager software update, and will apply to Payroll Manager data files for tax year 2025-26. The facility to create payroll data files for tax year 2025-26 will be implemented by the software towards the end of the current tax year – typically around the first week of March.