Employers need to start preparing for key payroll and HR updates that will take effect from April 2025. Here’s a breakdown of what’s changing and how it could impact your business.
Employers NI
Increase in Employers NI from 13.8% to 15%. The salary threshold at which payments start will drop from £9,100 to £5,000.
The Employment Allowance has increased from £5,000 to £10,500 per annum
New National Minimum Wage which applies from 1st April 2025
Workers aged 21 and over: £12.21 per hour
Workers aged 18-20: £10.00 per hour
Workers aged 16 and 17 (and apprentices): £7.55 per hour
Accommodation offset: £10.66 per day
New statutory rates
The statutory rates of pay applicable to family leave and statutory sick pay are updated on an annual basis. The new rates, which will apply from 6th April 2025 are as follows:
Statutory maternity, paternity, shared parental, adoption, neonatal and parental bereavement pay: £187.18 per week. The lower earnings limit will increase to £125 per week.
92% if your total Class 1 National Insurance (both employee and employer contributions) is above £45,000 for the previous tax year
108.5% if your total Class 1 National Insurance for the previous tax year is £45,000 or lower
Statutory sick pay: £118.75 per week
These figures may be replaced by higher amounts if an employer chooses to offer more, either voluntarily or as required by contract.
Neonatal Leave and Pay
The Neonatal Care (Leave and Pay) Act 2023 received Royal Assent in April 2024 and will, we expect come into force in 6th April 2025 (subject to Parliamentary Approval). Eligible parents will be entitled to up to 12 weeks’ neonatal care leave (and pay) if their baby is admitted to hospital up to the age of 28 days for a continuous stay of 7 days or more. The right will be in addition to maternity and paternity leave/pay rights. We have not received the final details yet but this will be a day one right and the pay will still require the 26 weeks service rule (currently).
What Employers Need to Do Now
✅ Review payroll systems to accommodate new NI rates, minimum wage, and statutory pay rates.
✅ Communicate changes to employees in advance, particularly those on minimum wage.
✅ Update HR policies to include neonatal leave provisions.
✅ Stay updated on final legislation changes and further government guidance.
We’ll continue to share updates as they become available. If you need tailored payroll or HR support, get in touch with our team.
