Tax tip: Budget and employer NIC

Advisers will be aware of the rise in employer NIC from April 2025 onwards. However people may have not realised the scale of these extra charges from an NIC cost perspective.

The increase in the employer’s NIC rate to 15% combined with the reduction in the ‘starting point’ for employer’s NICs represents a 26% increase in the overall employer NIC burden for the employer with an ‘averagely paid employee’ on say £35 000 a year. For employers with higher-paid employees – someone on say £100 000 a year – the changes still represents a 13% rise in the employer NIC burden.

So what can employers do to mitigate these extra costs?

They could bring forward the payment of certain earnings (eg bonuses) so that they are paid before the start of the 2025-26 tax year and the employer still benefits from the 2024-25 NIC...