In April 2025, the UK Government will implement the latest National Minimum Wage Increase, along with the well-documented uplift to Employer’s National Insurance contributions and changes to NI thresholds.  

National Living Wage changes

The national minimum wage, also known as National Living Wage, will increase to £12.21 per hour for workers over 21 from April 2025.

When the new rate takes place in April, this will represent an increase of 6.7% for those aged 21 or above.

National Minimum wage rates for younger workers will also increase. 18-20-year-olds will also get a wage boost to £10.00 per hour – a £1.40 hourly pay rise.

An illustration of how this might work can be seen below:

This means the annual salary for a 37.5 hour week minimum salary would be  £23,810 or for a 35 hour week £22,222 per annum.

If you need further information the government site has all the updated info here: https://www.gov.uk/national-minimum-wage-rates

Employer’s National Insurance increase

The second major employment cost change coming in to place from April 2025 is the increase to Employer’s National Insurance contributions and amendments to Employer’s NI thresholds.

This measure decreases the NICs Secondary Threshold, the earnings after which an employer becomes liable to pay secondary Class 1 NICs on a given employment. The Secondary Threshold is currently set at £9,100 a year, and will be reduced to £5,000 a year.

The Secondary Threshold of £5,000 a year will be in effect from 6 April 2025 until 5 April 2028. Thereafter the Secondary Threshold will be increased in line with Consumer Prices Index (CPI). This does not impact other employer NICs thresholds such as the Apprentice Upper Secondary Threshold or the Upper Secondary Threshold for employees under 21.

This measure also:

• increases the secondary Class 1 NICs rate from 13.8% to 15%
• increases the maximum Employment Allowance from £5,000 to £10,500
• removes the restriction that currently applies to the Employment Allowance where employers who have incurred a secondary Class 1 NICs liability of more than £100,000 in the tax year immediately prior to the year of the claim are unable to claim it — this means all eligible businesses and charities will be able to claim a greater reduction on their secondary Class 1 NICs liability, irrespective of what their secondary Class 1 NICs liabilities were in the tax year prior to the year of the claim

More information can be found here: https://www.gov.uk/government/publications/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl/changes-to-the-class-1-national-insurance-contributions-secondary-threshold-the-secondary-class-1-national-insurance-contributions-rate-and-the-empl

Share