National Living Wage and National Minimum Wage

The government has announced increased rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from 1 April 2025.

The rates which will apply are as follows:

• NLW From 1 April 2025 £12.21 for aged over 21
• For ages 18-20 £10.00
• 16-17 £7.55
• Apprentices £7.55

The apprenticeship rate applies to apprentices under 19 or 19 and over in the first year of apprenticeship.

National Insurance contributions

Employees and NICs from 6 April 2024 the main rate of Class 1 employee NICs is 8%. The employer rate is 13.8%.

The government announced that it will increase the employer rate from 13.8% to 15% from 6 April 2025.

The Secondary Threshold is the point at which employers become liable to pay NICs on an individual employee’s earnings and is currently set at £9,100 a year.

The government will reduce the Secondary Threshold to £5,000 a year from 6 April 2025 until 6 April 2028, and then increase it by Consumer Price Index (CPI) thereafter.

The Employment Allowance currently allows businesses with employer NICs bills of £100,000 or less in the previous tax year to deduct £5,000 from their employer NICs bill.

From 6 April 2025 the government will increase the Employment Allowance from £5,000 to £10,500, and remove the £100,000 threshold for eligibility, expanding this to all eligible employers with employer NIC bills.

Although increased funding to provide breakfast clubs and childcare was also announced it is important to note that this was for England only. This is an issue devolved to the Scottish Government.

Source: Autumn Budget 2024 (print)