Chancellor Rachel Reeves announced several important changes in the Autumn Budget 2024. These changes will affect Employers’ National Insurance and the National Minimum Wage. This will greatly affect employers’ wage bills. Here are the key measures and their likely effects on your business and employees:
National minimum wage adjustments
- 21 and over: The rate will rise to £12.21 per hour.
- 18-20-year-olds: The rate will increase to £10 per hour.
- Apprentices and under 18: The rate will see the largest hike to £7.55 per hour, moving towards a unified National Living Wage rate.
While these increases will benefit lower earners, more individuals may earn over the personal allowance threshold, leading to income tax implications.
Apprenticeship levy
The budget includes a future consultation on reforming the Apprenticeship Levy into a more flexible growth and skills levy, with an investment of £40 million.
Employer National Insurance Contributions
- No changes for employees: Rates and thresholds remain the same.
- For employers: The threshold for paying National Insurance contributions will be reduced from £9,100 to £5,000 per employee. This aims to relieve financial pressure on smaller businesses and encourage hiring.
Employment allowance increase
The employment allowance for small businesses will increase from £5,000 to £10,500, allowing more companies to benefit from reduced National Insurance costs.
Final thoughts
These changes are designed to support both employees and employers, with a focus on increasing wages and reducing costs for small businesses. Don’t let payroll changes catch you off guard. Schedule a consultation with our experts to understand the implications and how Payspace can help you navigate them smoothly.
