The tax year 2025/26 will bring significant changes if you are an employer.  Here’s what you need to know.

Wage Rates

National Living Wage and National Minimum Wage will see substantial increases:

• 18-20 year olds: 16.3% increase
• 16-17 year olds and apprentices: 18.0% increase
• Government aims to extend NLW to 18-year-olds in the future

National Insurance Contributions

The key changes here are as follows:

• Employer Class 1 NICs threshold drops from £9,100 to £5,000 annually
• Secondary Class 1 NICs rate increases from 13.8% to 15%
• Employment Allowance increases from £5,000 to £10,500

Employment Rights

The new Employment Rights Bill introduces day-one rights for: Bereavement leave, Paternity leave and Unpaid parental leave.

Flexible working is set to become the default, and there are reforms to Statutory Sick Pay.

Consultations are ongoing, so many of these provisions are unlikely to take effect before 2026.

Benefits Reporting

The headlines here are:

• Mandatory reporting of most benefits through payroll from April 2026
• Voluntary payrolling for 2025/26 requires HMRC pre-registration before 6 April 2025
• The government’s commitment to maintain a constant Official Rate of Interest throughout a tax year will no longer apply from 6 April 2025

Employers should start strategic planning now to adapt to these upcoming changes and manage potential financial impacts effectively.  If you’d like some help navigating these changes, do get in touch.