New changes to employer National Insurance Contributions (NICs) will significantly impact medium-sized businesses, incurring costs up to £8,472 annually. While smaller employers may benefit from an increased Employment Allowance, those with more than 8-10 employees will see substantial financial burdens. Employment Hero's analysis highlights a 0.3% average monthly employment contraction since the NIC increase announcement, with younger workers particularly affected. The situation is worsened in regions like London, where businesses face higher costs due to elevated wage averages, limiting their ability to invest in growth or wages.
These NIC changes create a significant burden for growing businesses at exactly the wrong time. Employers have been preparing for these increased costs by slowing hiring.
While the smallest businesses may benefit from the Employment Allowance extension, the cost escalates rapidly once you pass about 8-10 employees.
A medium-sized business with 20 or more staff is looking at over £8,400 in additional annual costs - money that could otherwise be invested in growth.
Regional differences are stark too - smaller businesses in London face costs sooner due to higher average salaries. You shouldn’t be punished for wanting to pay your staff enough.
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