Upcoming HR and Payroll Changes You Need to Know About for April 2025
At Zyla Accountants, we understand that navigating changes in employment law and payroll can be a bit overwhelming, but staying on top of these updates is crucial for your business.
This week, a host of new laws will be coming into effect, including important updates to payroll, parental leave, and National Insurance Contributions (NICs). Below, we’ve outlined the key changes set to impact businesses in the UK, all effective from April 1st and April 6th. Let’s break it down so you’re prepared.
Minimum Wage Increase from April 1
Starting tomorrow, April 1, both the National Living Wage (NLW) and National Minimum Wage (NMW) will see significant increases.
The NLW for workers aged 21 and over will rise to £12.21 per hour.
The NMW will increase to £10 per hour for those aged 18-20.
For workers under 18 or those on apprenticeships, the rate will rise to £7.55 per hour.
We recommend reviewing your payroll processes to ensure compliance with these changes.
Employer NICs Increase from April 6
Despite some hopes that the Spring Forecast might delay the increase in National Insurance Contributions, the planned rise is going ahead as expected. As of April 6, employer NICs will increase from 13.8% to 15%. Additionally, the secondary threshold (the point at which employers begin paying NICs) will drop from £9,100 to £5,000, lasting until 2028.
But there's a silver lining: the employment allowance is being adjusted to help offset some of the NIC burden. From April 6, eligible employers can save up to £10,500 annually, an increase from the previous £5,000. The eligibility threshold has also been lifted, so more businesses will be able to take advantage of this saving.
Parental Leave and Pay Changes from April 6
There will also be key changes to parental leave and pay starting on April 6.
Statutory maternity, paternity, adoption, and shared parental pay will rise from £184.03 to £187.18 per week.
The lower earnings limit, which determines eligibility for these payments, will rise from £123 to £125 per week.
A new provision will allow parents of babies in neonatal care to claim up to 12 weeks of paid leave. This will be at the same rate of £187.18 per week and is in addition to any other family leave entitlements.
This measure aims to support around 60,000 new parents, so it’s worth ensuring your payroll system is set up to handle these updates.
Statutory Sick Pay and Redundancy Pay Updates from April 6
In addition to changes to parental leave, there will also be changes to Statutory Sick Pay (SSP) and Statutory Redundancy Pay.
SSP will increase by £2, from £116.75 to £118.75 per week.
The lower earnings threshold for qualifying for SSP will also rise to £125 per week.
As for redundancy pay, the cap on "a week's pay" (used to calculate redundancy pay) will increase from £700 to £719. This increase will also apply to the additional compensation for unfair dismissal.
These changes are particularly relevant for businesses that may be facing redundancies in the near future.
Tribunal Awards Cap Increase from April 6
Lastly, from April 6, the maximum limit for compensatory awards for unfair dismissal will increase from £115,115 to £118,223. Additionally, the minimum basic award for certain unfair dismissals (including health and safety-related dismissals) will rise from £8,533 to £8,763.
How Zyla Accountants Can Help
We understand that keeping track of all these changes can be a lot to manage, and ensuring compliance with evolving legislation can be challenging. At Zyla Accountants, we're happy to help you stay compliant and ensure smooth payroll operations moving forward.