In April 2025, important changes were made in regards to payroll. These changes highlight the importance of keeping up with new regulations to ensure compliance, avoid penalties, and maintain regular business activity.
So, here’s a recap of the recent changes, why being aware of changes is important, and what you can do to stay ahead.
Photo by Towfiqu barbhuiya on UnsplashWhat Changed?
Minimum Wage
The UK Government announced another increase in national minimum wages (NMW) and national living wages (NLW) to support people in the current cost of living crisis. NMW increased to £12.21 per hour for those aged 21 and over, and NMW jumped to £10.00 per hour. When national wages increase businesses must ensure their payroll systems reflect the new hourly rates.
National Insurance Contributions
National Insurance contributions (NICs) saw a significant rise that could have an impact on both employers and employees. Employers’ National Insurance rate rose from 13.8% to 15% and the threshold for when employers start paying NICs dropped from £9,100 to £5,000 per year. Businesses were required to adjust their payroll systems to account for these changes.
Statutory Payments
Statutory Maternity Pay (SMP) and Statutory Sick Pay (SSP) both rose. SMP increased to £187.18 per week and SSP increased to £118.75 per week. This is something employers need to be aware of even if at the time this change didn’t pertain to them.
Why Being Aware of Changes is Crucial
Understanding any changes to payroll regulations is crucial. Failure to comply can result in significant fines, legal difficulties, and even reputational damage. All of which can disrupt business operations, reduce employee satisfaction, and negatively affect revenue.
What Businesses Can Do to Stay Ahead
Transitioning to cloud-based payroll software is an effective way to stay ahead. These systems not only make the payroll process simpler and more efficient, allow easy access for reporting, and improve employee satisfaction, but also ensure your business remains compliant with the most up to date legislations.
Additionally, businesses should consider seeking guidance from payroll experts or HR professionals to ensure changes are navigated correctly and payroll is managed effectively.
Regularly Review Your Payrolls
By keeping up with the latest regulations, regularly reviewing your payroll processes, and moving to a cloud-based payroll software, you can remain compliant and avoid hefty fines and legal battles that could cause significant damage to your business.
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