The new tax year is all but upon us so it’s the time of year where we need to be planning for the financial changes coming. The most significant impact for employers is, of course the changes to National Insurance. With 1.2 percentage point increase on the employers rate and a reduction of the secondary threshold (ST) from £9,100 per annum to £5000 per annum it’s a double whammy for employers, who end up paying a higher rate on more income.
For small employers there is some relief with the increase in the employment allowance from £5000 to £10,500 although for many this will be cold comfort.
So what does this all look like in real numbers? The following shows a comparisons of the contributions for 2025/24 and 2025/26:
|
Monthly Salary |
2024/25 | 2025/26 | % Increase |
| £2,500 | £240.40 | £312.45 | 30% |
| £5,000 | £489.70 |
£582.02 |
19% |
The full calculations are shown below:
Salary of £2,500 per month (£30k pa)
The Employers NI calculation is (salary – ST) x NI%
2024/5 = (2500-758) x 13.8% = £240.40
2025/6 = (2500-417) x 15% = £312.45
An increase of £72.05 (approximately 30%) on the previous years contribution.
Salary of £5,000 per month (£60k pa)
This is above the Upper Secondary Threshold (UST) so there is an extra step to the calculation:
((UST-ST)xNI%)+((5000-UST)x2%)
2024/5 = ((4189-758)x13.8%)+((5000-4189)x2%) = 473.48 + 16.22 = £489.70
2025/6 = ((4189-417)x15%)+((5000-4189)x2%) = 565.80 + 16.22 = £582.02
An increase of £93.32 (approximately 19%) on the previous years contribution.