In case you missed the news in the last few months following the Autumn Budget in October 2024, the Chancellor tweaked the Employer’s National Insurance rate and threshold at which it becomes payable starting from 6th April 2025.
Employers’ National Insurance is often described as “the tax on jobs” as it is a contribution that is paid on top of the gross pay for an employee; therefore, a tax cost borne by the employer.
For domestic employers, the two key changes impact the cost of hiring a nanny or other domestic help in the home:
- Percentage contribution rate increases by 1.2% to 15%
- The secondary threshold to which Employer’s NI becomes payable decreases from £9100 to £5000 per annum.
Employers’ NI: Tax Year – Comparison Table
In April 2025, even if nothing changes to your agreement with your nanny and they earn more than £417 per month, you can be certain you will be paying more to HMRC each month for your childcare.
Important notice:
All rates quoted are based on the GROSS pay rate, i.e. before deductions like Tax, NI and Pension.
If you pay your employee on a contractual NET PAY agreement, you will need to ensure the GROSSED-UP pay rate meets the specified national minimum & living wage rates.
