April 2025 Employer NIC Changes Impact Calculator
From 6 April 2025: Employer NIC rate rises from 13.8% to 15%, and the secondary threshold falls from £9,100 to £5,000 per year.
Frequently Asked Questions
From 6 April 2025: the employer NIC rate increased from 13.8% to 15%, and the secondary threshold (the salary above which employer NIC is paid) was reduced from £9,100 to £5,000 per year.
The Employment Allowance increased from £5,000 to £10,500 from April 2025. Eligible employers can reduce their employer NIC bill by up to £10,500 per year.
Most employers with employer NIC liabilities under £100,000 in the previous tax year. From April 2025, the £100,000 cap on prior year employer NIC was removed, making more businesses eligible.
A full-time worker earning £30,000 costs an extra ~£965 per year in employer NIC from April 2025. Workers on £50,000 cost an extra ~£1,415 more.
Yes. Reducing the secondary threshold from £9,100 to £5,000 means employers pay NIC on more of a low-paid worker's salary. For a worker earning £10,000, the employer NIC jumps from ~£125 to ~£750.
The NLW rose to £12.21/hour in April 2025. Combined with the higher employer NIC rate and lower threshold, employing a full-time NLW worker now costs significantly more for small businesses.
Employer NIC is not charged on salary sacrifice contributions to pension schemes or other qualifying arrangements. Increasing pension contributions via salary sacrifice reduces the employer NIC base.
These sectors employ many part-time, lower-paid workers and are disproportionately affected by the threshold reduction. Industry groups estimate significant job losses as a result.
Class 1A NIC (paid by employers on most benefits in kind) also increased to 15% from April 2025, raising the cost of company cars, health insurance and other benefits.
Apprentices under 25 earning below the upper secondary threshold (£50,270) are still exempt from employer NIC, providing an incentive to hire young apprentices.
Many limited company contractors will face higher costs if they are inside IR35 (deemed employment). Their deemed employer pays Class 1 employer NIC at 15%.
Future rates depend on government policy. Employer NIC has historically been seen as a business cost, but it is also a significant revenue source. There are calls for a review of employment taxation.