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2024 Autumn Budget – Payroll Changes from April 2025
2024 Autumn Budget – Payroll Changes from April 2025
The UK government's 2024 Autumn Budget introduces significant changes to the National Living Wage (NLW) and employer National Insurance Contributions (NICs), set to take effect from April 2025.
National Living Wage Increase
The NLW will rise by 6.7%, from £11.44 to £12.21 per hour, extending to workers aged 21 and over.
Employer National Insurance Contributions
Employer NICs will increase from 13.8% to 15%, with the earnings threshold for contributions lowering from £9,100 to £5,000.
Implications for Employers
These changes will elevate employment costs, particularly impacting sectors reliant on minimum wage labor. Businesses may need to adjust budgets, potentially affecting hiring, investment, and pricing strategies. Some companies, like Shoe Zone, have already announced store closures, citing increased costs from the budget measures.
Implications for Employees
Employees earning the NLW will benefit from increased wages, enhancing their purchasing power amid rising living costs. However, there are concerns that businesses might reduce hiring or increase prices to offset higher employment costs, potentially affecting job availability and inflation.
Conclusion
The 2024 Autumn Budget's adjustments to the NLW and employer NICs aim to improve wages for low-income workers and increase public funding through higher employer contributions. Employers should prepare for these changes by reviewing financial plans and employment strategies to accommodate the increased costs.
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