March' 25£14.8 Billion* NIC Surge in 2025 – What UK Businesses Need to Know

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With the upcoming increase in National Insurance contributions (NIC), UK employers will face higher payroll costs starting April 6th, 2025. Assuming the 1.2% rise in employer NICs, as per the OBR (Office for Budget Responsibility) forecast, UK businesses are expected to incur an additional £14.8 billion in costs.

These changes can haveserious implications for your bottom line, requiring careful adjustments to your financial planning and workforce management. The £14.8 billion increase will place added pressure on business margins, forcing many employers to rethink their expansion plans and cost structures. Read more to understand how these changes will affect your business and what steps you can take to manage them.

To minimize the impact of rising NIC costs, here’s how your business can stay ahead:

Optimize Workforce Composition- Leverage a flexible workforce model with a mix of full-time, part-time, and contract roles to reduce NIC costs.

Implement Salary Sacrifice Schemes- Maximize employee benefits like pensions or travel schemes to lower taxable income for both you and your employees.

Expand Your Talent Pool Internationally- Hire globally, particularly in countries with lower employment taxes, to reduce payroll overhead while accessing top talent.

Streamline Global Hiring & Compliance with EORs- EORs can help simplify your global expansion by managing international payroll, compliance, and employee benefits. This ensures that your business stays compliant while scaling your team across different regions with ease, without the complexity of local tax regulations.

For tailored advice on managing these changes effectively.

Schedule a free 15-minute consultation with one of our EOR specialists.