UK businesses are set to experience higher National Insurance (NI) contributions as key tax changes take effect on April 6, 2025. The employer NI rate will increase from 13.8% to 15%, while the secondary threshold will drop from £9,100 to £5,000. These adjustments mean that employers will face increased payroll expenses for employees earning over £5,000 annually.
To help businesses navigate these changes, Novuna Business Cash Flow, a leading provider of cash flow finance solutions to SMEs and corporate entities across the UK, have produced an up-to-date, free to use national insurance calculator. This tool enables employers to estimate their monthly and annual NI contributions, ensuring compliance with the latest tax regulations.
Secondary Threshold: Lowered to £5,000 annually (£417 monthly).
Increased NI Costs: Employers will pay more NI for employees earning above £5,000.
Impact Example: An employer with a Category A employee earning £30,000 annually will now contribute approximately £3,749 per year in NI.
Understanding NI CategoriesEmployers must also ensure they apply the correct NI category when calculating contributions. The most common category is Category A, which applies to most employees. However, other categories apply to apprentices, veterans, and employees under 21, among others.
Why This Matters for Businesses
With payroll costs set to rise, businesses must proactively adjust their budgets and payroll systems to accommodate these changes. The NI calculator tool is designed to simplify this process by providing clear and accurate breakdowns of employer contributions based on salary and NI category.
Stay Ahead of the Changes
Employers are encouraged to start reviewing payroll strategies now to manage the impact of these higher NI costs effectively. The NI calculator tool offers a streamlined solution for estimating contributions and ensuring compliance with new tax laws.
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