National Insurance – Construction Industry

Jan 17, 2025 | Uncategorized

Let’s focus on National Insurance Contributions (NICs) today.

National Insurance is a vital part of funding state benefits like pensions and healthcare. If you’re a construction employer, you need to deduct employee NICs and also pay employer NICs on their earnings.

The key rates:
Employees:
➡️ 12% on earnings between £12,570 and £50,270.

➡️ 2% on earnings over £50,270.

Employers:
➡️ Employers pay 13.8% on earnings above £9,100 per year per employee.

Strategies for construction businesses:
➡️ Use the Employment Allowance (up to £5,000) to reduce employer NIC liability.
➡️ Monitor your payroll software to ensure accurate deductions.

🚨Key changes coming April 2025 for employers 🚨

Effective April 2025, the employer NIC rate will increase by 1.2%, moving to 15%. Additionally, the earnings threshold for employer NICs will reduce to £5,000 (previously £9,100). However, the Employment Allowance will increase from £5,000 to £10,500 to help alleviate this burden for smaller businesses.

If you want to know how much extra this change is going to cost your business from April send me a message, or contact your accountant.

Need help managing your finances, check out our Virtual Finance Office, or book a Discovery Call today.

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