The new National Living Wage and National Minimum Wage rates will come into force from 1 April 2025.
There are also changes to the National Insurance employers pay that take effect from 6 April. For many businesses, the April payroll will represent a sizeable step up in labour costs.
As a reminder, here is a quick recap of the changes.
National Minimum Wage rates
The new minimum wage rates are as follows:
Hourly Rate:
National Living Wage (21 and over) - £12.21
18-20 Year Old Rate£ -10.00
16-17 Year Old Rate - £7.55
Apprentice Rate - £7.55
Accommodation Offset - £10.66
Employers National Insurance changes
The percentage rate of Employers’ National Insurance (NI) that’s paid on an employee’s earnings increases to 15% (from 13.8%).
The threshold that an employee needs to be earning before any Employers’ NI is due drops to £5,000 a year. Previously this was £9,500.
If you use online payroll software, the new Employers’ NI rates should be automatically included. However, please check with your payroll software provider if you are not sure.
If you need any help using the new rates or calculating the amount of minimum wage that is due to a worker, please get in touch. We would be happy to help you!
From October 2026, companies will have to comply with new rules on trade unions introduced as part of the Employment Rights Act.
The tax rules on Benefits in Kind (BIKs) are changing. From 6 April 2027, Phase 1 of HMRC’s ‘Mandatory payrolling of Benefits in Kind and expenses’ comes into force. Phase 1 will apply only company cars, car fuel, vans, van fuel and medical benefits.