National Insurance Changes from April 2025: What You Need to Know
Big changes are coming to National Insurance from April 2025. These changes affect employers, employees, and the self-employed.
At I Hate Numbers, we help you understand what these updates mean for your business and your finances.
National Insurance Changes for Employers
From 6 April 2025, employers will face increased costs.
Secondary Threshold Drops
The secondary threshold drops to:
- £96 per week
- £417 per month
- £5,000 per year
This means employers pay secondary Class 1 contributions sooner on employee earnings.
National Insurance Rate Increase
The employer’s NIC rate increases from 13.8% to 15%. This change applies to earnings above the secondary threshold.
Part-Time Workers Affected
Part-time employees previously under the limit may now fall within the scope of employer NIC payments.
Good News: Employment Allowance Increases
The Employment Allowance rises from £5,000 to £10,500. That’s a potential lifeline for smaller businesses.
Bigger Employers Can Now Claim
From 2025/26, employers with NIC bills over £100,000 can still claim the Employment Allowance.
Note: Single-director companies with no other employees remain ineligible.
Explore how this affects your payroll using our Payroll Calculator 2025-26.
Some Employers Will Still Pay More
Even with the increased allowance, larger employers will see higher NIC bills due to the threshold cut and rate rise.
No Change to Upper Secondary Thresholds
Rates for specific employee categories remain unchanged at:
- £967 per week
- £4,189 per month
- £50,270 per year
These thresholds apply to:
- Under 21s
- Apprentices
- Veterans
Employers might consider hiring from these groups to reduce National Insurance costs.
Freeports and Investment Zones
Thresholds for Freeport and Investment Zone employees stay at:
- £481 per week
- £2,083 per month
- £25,000 per year
Class 1A and 1B Rates Increase
These rates also rise to 15%, in line with secondary Class 1 rates.
National Insurance for Employees
No Increase in Employee NIC Rates
Employees won’t pay more in 2025/26. The primary threshold stays at:
- £242 per week
- £1,048 per month
- £12,570 per year
Upper Earnings Limit Stays the Same
The upper earnings limit remains:
- £967 per week
- £4,189 per month
- £50,270 per year
Employee Contribution Rates
These rates remain unchanged:
- Main rate: 8%
- Additional rate: 2%
Protection for Low Earners
Earnings between the lower earnings limit and the primary threshold give a qualifying year for state pensions.
The lower earnings limit increases to:
- £125 per week
- £542 per month
- £6,500 per year
National Insurance for the Self-Employed
Class 4 NIC Stays the Same
Self-employed people pay Class 4 NICs if profits exceed £12,570. That’s the lower profits limit.
Rates remain:
- Main rate: 6%
- Additional rate: 2% (above £50,270)
NIC Credit for Mid-Level Profits
If profits fall between £6,845 and £12,570, a NIC credit gives a qualifying year for the state pension.
Voluntary Class 2 NICs
Below £6,845, self-employed people can opt to pay Class 2 NICs at £3.50 per week.
This secures a qualifying year for state pension purposes.
Voluntary Class 3 Contributions
Those not eligible for Class 2 can pay Class 3 NICs. This helps plug gaps in their NIC record.
In 2025/26, the rate is £17.75 per week.
What This Means for You
These changes affect payroll, employment costs, and retirement planning. They could increase your NIC bill or offer new savings.
You must review your payroll, especially if you employ part-time workers or run a small business.
We recommend checking your payroll figures using our Payroll Calculator 2025-26.
Book Your Tax Diagnostic Today
Want to understand how these changes impact your business?
Book a Tax Diagnostic with us today. We’ll help you reduce risks, spot tax-saving opportunities, and stay compliant.
👉 Book Your Tax Diagnostic Now
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