Starting in April 2025, several significant changes will occur in UK employment legislation. These updates include increases to the National Minimum and Living Wage, new thresholds and rates for National Insurance Contributions (NICs), adjustments to statutory payments such as sick pay and parental leave pay, and the introduction of a brand-new entitlement: Neonatal Leave and Pay.
If you are a business owner, HR professional, or manager, now is the time to review these changes, assess their impact, and ensure systems and processes are fully compliant.
Here is a reminder of what needs to be in place this month.
National Minimum and Living Wage increases
From 1st April 2025, the National Living Wage and National Minimum Wage rates will rise:
- National Living Wage (age 21+): £12.21 per hour (up 6.7%)
- National Minimum Wage (age 18–20): £10.00 per hour (up 16.3%)
- National Minimum Wage (age 16–17 and apprentices): £7.55 per hour (up 18%)
These changes represent some of the largest percentage increases in recent years. These adjustments will directly impact your payroll if your business employs staff on or near the minimum wage, full-time, part-time, or seasonal.
Auditing your current wage structures, particularly for junior staff, is essential to ensure compliance and avoid underpayment. Failure to pay the correct rates can result in financial penalties and reputational damage.
Changes to employer National Insurance Contributions (NICs)
From April 6th 2025:
- The employer NIC rate (secondary Class 1 NICs) will rise from 13.8% to 15%
- The lower earnings threshold for employer NICs will reduce from £9,100 to £5,000
- The Employment Allowance will increase from £5,000 to £10,500
This means employers will begin paying NICs on a greater portion of employee earnings and at a higher rate. Businesses with larger workforces may see a noticeable rise in costs, though the increased Employment Allowance will help some smaller businesses offset this – assuming they meet the eligibility criteria.
Statutory Sick Pay and family leave pay increases 6th April
- Statutory Sick Pay (SSP) will increase to £118.75 per week
- Statutory Maternity, Paternity, Adoption, and Shared Parental Pay will rise to £187.18 per week
Ensure your payroll systems reflect the new rates and update relevant policy documents to avoid issues or over/underpayments.
New: Neonatal care leave and pay (The Neonatal Care (Leave and Pay) Act 2023) 6th April
From April 2025, eligible parents whose newborn baby is admitted to neonatal care will be entitled to up to 12 weeks of paid leave in addition to existing maternity and paternity entitlements.
Key points:
- Applies to parents of babies receiving neonatal care within the first 28 days of life.
- Leave can be taken in blocks or flexibly, depending on the duration of neonatal care.
- The entitlement is statutory and will be paid at the standard rate (matching other family-related statutory payments).
Employers should review family leave policies and ensure managers are aware of this new right, particularly in sectors with younger workforces or shift-based roles. Payroll systems and staff handbooks may need updating.
What employers should already have in place?
To stay compliant and manage these changes effectively:
- Review employee wages and ensure pay rates meet the new legal minimums
- Update payroll systems to reflect new NICs, wage rates, and statutory payments
- Review eligibility for the increased Employment Allowance
- Update HR policies, especially those covering pay, sick leave, parental leave, and neonatal care
- Train line managers on the new neonatal care leave entitlement
- Seek professional HR advice for contract changes, redundancy planning, or restructuring activity
Support from CXCS
We can support your business with HR compliance via our expert team, who can provide access to support and legal advice, leaving you to focus on your business. If you’d like to find out more about how we can help, please get in touch.
Call us on 01981 590514.