The Chancellor announced in her recent budget changes to the rates and thresholds at
which employers pay NI contributions and the rate and threshold for which Employment
Allowance is eligible. But what do these changes mean for your business? Will your employers’
NI bill increase or decrease? It depends on the number of employees you have and your
annual gross salary bill.
The following changes were announced:
| 2024/25 | 2025/26 | |
|---|---|---|
| Threshold at which employers start paying NI | £9,100 | £5,000 |
| Rate of NI payable | 13.8% | 15.0% |
| Employment Allowance (EA) | £5,000 | £10,500 |
| Annual NI bill under which EA eligible | £100,000 | £0 |
Note that Employment Allowance for both years is not available if there is only one sole director on the payroll.
Examples of the effects of these changes are below:
| Number of Employees | Annual Gross Salary Cost | Increase/(Decrease) in annual Ers NI bill |
|---|---|---|
| 1 | £10,000 | £625 |
| 2 | £80,000 | £(3,530) |
| 5 | £160,000 | £(1,050) |
| 10 | £250,000 | £2,552 |
| 30 | £400,000 | £14,457 |
| 80 | £4,000,000 | £77,920 |
| 100 | £5,000,000 | £100,025 |
For a more accurate calculation specific to your business please contact us!