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Autumn Budget: National Insurance Changes 2024

national insurance changes, changes in national insurance

Contents

2024/25 Payroll Legislation Guide

The facts, figures, thresholds and allowances for 2024/25, in one handy guide.

As promised in this year’s Autumn Budget, there have been no increases in tax and National Insurance (NI) for employees. 

Unfortunately, the same can’t be said for employers, with huge National Insurance changes afoot in April 2025. 

It’s a big shake-up for all employers, with many now working behind the scenes to fully understand the financial impact that the threshold and rate changes to National Insurance will have—and how that plays out in their budget for the next financial year. 

So we’ve mapped out the key changes in National Insurance coming in April, and what they mean for your payroll costs. 

National Insurance changes

Employer’s NI to be increased from 13.8% to 15%

From April 2025, the new Employer’s National Insurance rate will go up from 13.8% to 15%, meaning payroll costs will rise for all businesses.  

Employer’s NI Secondary Threshold decreasing from £9,100 to £5,000

Also from April, the Employer’s NI Secondary Threshold will drop from £9,100 to £5,000, meaning employers will start paying NI on employee earnings above £417 per month instead of £758.  

The National Insurance changes in practice

It will be a noticeable impact for everyone, whether small businesses looking to find funds or large employers seeing their NI bill drastically increase. 

But there’s still time to prepare, and to do that you need to get to grips with what the new national insurance rates will look like in practice in your budget. 

What that looks like in practice is, of course, totally dependent on a lot of things; how many people you employ, your remuneration structures, your eligibility for the Employment Allowance, to name a few. 

What we can help with, though, is a few examples of what that will look like on an employee-by-employee basis for businesses not eligible for Employment Allowance. The below table shows how much more NI you’ll pay for an employee on £20,000, an employee on £40,000, and an employee on £60,000 each month, in line with the new National Insurance changes: 

Salary Tax Year Monthly NI-able Earnings Monthly Employer NI Monthly Increase
£20,000 2024/25 £908.67 £125.40 +£62.05
2025/26 £1249.67 £187.45
£40,000 2024/25 £2575.33 £355.40 +£82.05
2025/26 £2916.33 £437.45
£60,000 2024/25 £4242.00 £585.40 +£102.05
2025/26 £4583.00 £687.45

And an annual view per employee: 

Salary Tax Year Annual NI-able Earnings Annual Employer NI Annual Increase
£20,000 2024/25 £10,904 £1,504.75 +£744.65
2025/26 £14,996 £2,249.4
£40,000 2024/25 £30,904 £4,264.75 +£984.65
2025/26 £34,995 £5,249.4
£60,000 2024/25 £50,904 £7,024.75 +£1,224.65
2025/26 £54,996 £8,249.4

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Additional changes in National Insurance

Employment Allowance increasing to £10,500 and removal of the £100,000 threshold

The increase in Employment Allowance to £10,500, with no £100,000 threshold, means that more employers will be eligible for the scheme—doubling the benefit from the previous £5,000. It’s worth noting that, excluding the threshold removal, all the eligibility criteria are staying the same: 

  • Public bodies or businesses doing more than half of their work in the public sector and one-director companies where the director is the only employee liable for secondary Class 1 national insurance are not eligible. 
  • Employees who fall under IR35 are excluded from the employment allowance calculations  
  • Companies with de minimis state aid might also have restricted ability to claim the allowance. 

Income tax and NI threshold freeze won’t be extended beyond 2028/29

The freeze on income tax and NI thresholds will end after 2028/29, meaning they’ll start increasing with inflation again. This will bring some ‘tax relief’ for employees and reduce the tax burden as wages rise, with less fiscal drag than we’ve seen over recent years. Another positive for employees to come out of changes in National Insurance. 

Lower Earnings Limit (LEL) is increasing by £2 to £125

The Lower Earnings Limit (LEL) is set to increase by £2, bringing the weekly threshold to £125. This change means employees earning at least £125 per week will start building up eligibility for certain benefits, like State Pension or SSP. 

Need a hand with changes in National Insurance?

Regulatory compliance is at the absolute heart of everything we do, and that includes National Insurance changes. Whether it’s our internal experts keeping everyone informed, or our in-house developers making sure our software is up to date with the latest legislative changes, you can always count on us. 

To find out more about our payroll solutions and what we do to keep all our customers compliant, get in touch. 

Cintra - Payroll Legislation Guide 2425
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Payroll Legislation Guide

The facts, figures, thresholds and allowances for 2024/25 spanning tax, National Insurance, pensions, statutory payments and more.

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Danielle Nicholson
Danielle is our Communications and Content Manager, leading the content strategy for Cintra. Outside of her passion for all things copywriting, she loves being on the water in a kayak or taking long walks with her Golden Retriever!