Employer National Insurance Contribution changes from April 2025
In the Autumn Budget of 2024 the Chancellor announced four changes to employer National Insurance contributions (NICs), all of which take effect at the start of the 2025-26 tax year (6 April 2025).
- A reduction of the secondary Class 1 National Insurance (employer) threshold from £9,100 to £5,000 per annum.
- An increase to the main rate of secondary Class 1 National Insurance (employer) contributions from 13.8% to 15%.
- An increase to the maximum Employment Allowance claim amount per year from £5,000 to £10,500.
- The removal of the £100,000 restriction where employers with an employer NIC liability above this level in the previous tax year were unable to claim the Employment Allowance.
Single-director companies are not eligible for the employment allowance
Limited companies cannot claim Employment Allowance if they have just one director and that director is the only employee liable for secondary Class 1 National Insurance.
For single-director companies paid at the personal allowance of £1048 per month, this will result in an increase in Employer National Insurance Contribution from £478.86 (approximately £40 per month) to £1,135.50 (approximately £95 per month).
Other considerations
If your income is subject to CIS deductions, these can be used to offset your NIC liability as previously.
If you have a Direct Debit set up to leave your account monthly, this will continue, with the increase automatically accounted for on each payment.
Please let us know if you want us to help set up a Direct Debit for PAYE. We are happy to help you.
Please feel free to get in touch should you have any questions or need assistance navigating this adjustment.
