Is the increase in Employer’s National Insurance due in April, really a tax on employees, not employers?
If you have 100 employees, and their average salary is £40,000. Then your total wage bill is currently about £4,421,420 including Employer’s National Insurance (ignoring the pension costs).
From April 2025, the increase will be about £93,580. An increase of 2.12%.
If you usually conduct annual pay reviews, and budget for between 2-5% annual inflationary pay increases, then you may instead budget between 0-3% now, due to the increased costs of Employer’s National Insurance.
Therefore over time, is this increase going to hit employers or employees more, or perhaps both.
In some construction services where margins are already tight, this increase could cause a cash flow problem if not planned for.
PS: here is a link to our employment cost calculator. It will help you calculate your total employment costs, and the impact of the national insurance increase.
To learn more about how we help construction businesses owners ditch the burden of finances, visit our website here.
