First published on Friday, February 14, 2025
Last updated on Friday, February 14, 2025
With employer National Insurance Contributions (NICs) increasing, new employment laws coming into effect, and the Spring Forecast set for March 26, 2025, you need to be ready for some big changes this April.
Here’s what you need to know—and how to get ahead of these changes.
Employer National Insurance is going up
From April 6, 2025, your employer NICs will increase from 13.8% to 15%. While it might not seem like a huge jump, it adds up fast if you have multiple employees.
What this means for you
If you pay an employee £30,000 per year, your NICs will increase from £4,140 to £4,500—a £390 increase per employee.
If you have 10 employees, this could cost you an extra £3,900 per year.
How to prepare
Review your payroll costs—calculate exactly how much more you’ll be paying.
Read our article on how to calculate payroll.
Look into salary sacrifice schemes—offering benefits like pension contributions can reduce taxable earnings.
Factor in NIC costs when hiring—if you’re planning to recruit, account for the extra tax burden.
Use payroll software—it can help you calculate costs, stay compliant, and manage payroll efficiently.
The Neonatal Care (Leave and Pay) Act 2023 Comes into force
Starting April 6, 2025, your employees may be entitled to up to 12 weeks of paid leave if their baby requires neonatal care. This is in addition to maternity and paternity leave, so you may need to cover for longer absences. For the ins and outs of the new Statutory Neonatal Care Leave, you can read our article Neonatal care leave and pay.
How this affects your business
Longer paid leave for eligible employees, which could leave you short-staffed.
Extra admin work—you’ll need to process leave requests and adjust payroll accordingly.
Potential additional staffing costs, if you need to cover absences.
How to prepare
Update your HR policies to include Neonatal care leave entitlements.
Train your payroll and HR teams on the new rules.
Plan for potential staffing cover if key employees take extended leave.
Use HR software and seek employment law advice—this will help you track leave, manage payroll adjustments, and stay legally compliant.
Sign up to one of our informative webcast on neonatal care leave and pay.
National Minimum Wage is increasing
From April 1st, 2025, the National Minimum Wage including the Living Wage will rise to the following:
For workers aged 21 and over it will be £12.21 per hour, previously £11.44.
For those aged 18-20 it will be £10.00 per hour, previously £8.60.
For under 18 but over Compulsory School Age (CSA) it will be £7.55 per hour, previously £6.40.
For apprentices it’s rising to £7.55 per hour, previously £6.40.
What this means for you
Higher payroll costs, especially if you employ lower-wage workers.
Potential wage structure changes, as you may need to raise wages across multiple pay grades.
How to prepare
Review your payroll and adjust budgets for the increase.
Communicate any pay adjustments to your staff in advance.
Read our article on how to manage payroll in line with wage standards.
Use payroll software with expert advice—this will help ensure accurate wage calculations and compliance with new pay rates.
The Spring Forecast—What else could change?
While the Spring Forecast on March 26, may not introduce immediate policy, budget or tax changes, it will give you an idea of what’s coming next.
Key areas to watch
Will employer NICs increase again in 2026?
Could the VAT threshold rise?
Could there be a U-turn from announcements made in the Autumn Budget?
By staying informed, you can plan ahead and avoid being caught off guard by future tax hikes or regulatory changes.
Final steps: How to stay ahead of rising costs
With these tax and employment law changes coming in April, you need to act now to avoid financial strain and compliance issues.
Calculate the impact of the NIC increase and adjust your budget.
Update your HR policies to comply with the Neonatal Care (Leave and Pay) Act 2023.
Ensure your payroll is ready for minimum wage and holiday pay changes.
Watch the Spring Budget Forecast for future business tax updates.
Use HR software and seek expert HR advice—this will help you stay compliant, manage payroll changes, and prepare for upcoming costs.
April’s changes may increase costs for your business, but with the right preparation, you can stay ahead and keep things running smoothly.
