Starting April 1st, there will be a rise in the National Living Wage and changes to National Insurance Contributions (NICs), which will impact both employees and employers. Employees over 21 will see a 6.7% wage increase, benefiting many younger workers and apprentices by improving their financial security. However, this also means higher payroll costs for employers, who must adjust their budgets accordingly. To mitigate these costs, companies may need to invest in automation and operational efficiency. Grateful provides a streamlined tronc management solution to help businesses manage these changes.
Workers will experience substantial financial benefits from these changes. Employees aged 21 and above earning the National Living Wage will see a 6.7% pay rise, significantly boosting their annual earnings. Younger workers and apprentices will experience even greater increases, helping improve financial security and reducing income inequality among lower-paid demographics. These measures aim to boost living standards, especially in the face of ongoing economic pressures.
However, the combined effect of the rise in the National Living Wage and changes to National Insurance Contributions (NICs) will significantly increase payroll expenses for employers, especially those with large workforces or many entry-level positions.
Employers will need to budget carefully to accommodate higher wages and increased NIC rates—from 13.8% to 15%—while also factoring in the reduced secondary NIC threshold from £9,100 to £5,000.
Our platform can enable businesses to capitalise on NIC exemptions by operating an independent tronc scheme to save costs for businesses.
#national-living-wage #national-insurance-contributions #payroll-expenses #employee-benefits #financial-security
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