Navigating the 2025 Payroll Landscape: Key Changes Employers Must Know

The 2025/26 tax year introduces significant changes affecting employers across the UK. From increased National Insurance contributions to adjustments in statutory pay rates, staying informed is crucial for compliance and financial planning.

Key Updates:

• Employer National Insurance Contributions (NICs): From April 6, 2025, the employer NIC rate increases from 13.8% to 15%. Additionally, the secondary threshold—the point at which employers start paying NICs—drops from £9,100 to £5,000. This change is expected to impact approximately 940,000 employers .

• Employment Allowance: To alleviate the NIC increase burden on small businesses, the Employment Allowance rises from £5,000 to £10,500. Notably, the previous cap restricting eligibility to employers with NIC liabilities under £100,000 has been removed, broadening access to this relief .

• Statutory Pay Rates: Statutory Maternity, Paternity, Adoption, and Shared Parental Pay rates increase to £187.18 per week. Statutory Sick Pay rises to £118.75 per week .

Implications for Employers:

These changes necessitate a thorough review of payroll systems and budgets. Employers should ensure their payroll software is updated to reflect new rates and thresholds. Additionally, revisiting employment contracts and staff communications can help manage expectations and maintain transparency.

At Mario Jacobs Ltd, we offer comprehensive payroll services to help businesses navigate these changes seamlessly. Contact us to ensure your payroll processes remain compliant and efficient.