Changes announced in the 2024 Autumn Budget are set to significantly impact employer wage bills from April 2025. These changes include:
- Large increases in National Living/Minimum Wage rates
- An increase in employer’s National Insurance contributions from 13.8% to 15%
- Lowering the employer threshold for National Insurance contributions
- An increase in the employment allowance to £10,500 per annum, with the removal of the £100,000 threshold
While the immediate impact of these changes is clear, they also have the potential to affect other areas of wage bills, for example, higher salaries will lead to increased employer pension contributions and may result in more employees being automatically enrolled into pension schemes. Additionally, larger employers with a pay bill exceeding £3 million will now be subject to the 0.5% apprenticeship levy.
To assist businesses in estimating some of these increased costs, Armstrong Watson has developed a new wage forecasting tool. This free tool, created by our payroll service line and IT team, is designed to be user-friendly, however it does make several assumptions to simplify its use.
Before using the tool, please ensure you read the following disclaimer document.
Armstrong Watson Payroll Clients
If you are an Armstrong Watson client who use our payroll services, there are two options available:
1. Self-Population: If you prefer to populate the tool yourself, please use the link above.
2. Assisted Population: If you would like our payroll team to pre-populate the tool with as much data as possible from our payroll system, please contact us at awpayroll@armstrongwatson.co.uk and we will send you the pre-populated forecasting tool as soon as possible. Note: you may need to complete certain fields, such as contracted hours, as specified in the disclaimer document where the data is not held.
For some businesses, an increase in wage costs will put significant pressure on day-to-day running and may impact viability. If you have any concerns about how you will fund your increasing wage bill, please get in touch with our advisory team who can work with you to put a plan in place, email help@armstrongwatson.co.uk or call 0808144 5575.
