Companies that employ employees in the national living wages (NLW) are preparing to increase the costs of more than 2100 pounds for each employee as of April 2025, according to the PKLICK ROTHENBERG Consulting Company for Tax and Trade Review.
The increase follows a simultaneous rise in NLW and national insurance contributions (NIC).
Matt Craoford, a partner in Blake Ruthenberg, says that with NLW from 11.44 pounds to 12.21 pounds per hour, employers can see an annual increase of about 1400 pounds in wages for each full -time worker. This is an additional 700 pounds in NIC for each employee, which reflects the latest budget changes to the advisor. “We know many employers who are already reviewing employment plans or salaries in salaries for those who are a little higher than NLW during the balance of their books.”
Big companies that have large numbers of employees who have less than an informal-especially in retail, hospitality and transportation-the largest pressure. However, the smaller companies get a partial pillow through the “National Employment Service allowance”, which will double from 5,000 pounds to 10,500 pounds. Although this relieves some NIC increases for small companies, they still have to meet the same requirements for the minimum wage, such as adult employers.
In an attempt to manage public expenditures, companies are increasingly exploring salary sacrifices, as employees effectively trade part of their salaries to obtain appropriate benefits such as additional pension contributions or electric cars. But “these arrangements do not help the lower employees,” says Crowford, because the law requires their total salary to stay above the national minimum wage.
Kraovord warns that the reality of many companies that contain large gatherings of paid employees are the reluctance to employ or provide additional work restrictions, Croford warns. “These higher costs may pay some employers to expand or reduce investment in order to stay within the budgets,” he says, indicating that new measures may have a ripples across multiple sectors when it comes into effect in April 2025.