Changes In Employers National Insurance & Employment Allowance
If you are a bookkeeper, here's a great idea ...
Posted by Alison Mead on 04/11/2024 @ 8:00AM
Full, disclosure, this wasn't my idea though I was able to help one of my bookkeeping mentor clients with her calculations this morning to get the sanity of her spreadsheet correct and was able to correct a mistake in the sheet ...
Do you know how the changes in Employers National Insurance will affect you?
Here it is: Why not work out how the changes in employers' National Insurance (NI) and the increase in employment allowance will affect their likely NI bill for next year?
The changes mean that you start paying employers NI on your staff's earnings a lot sooner with the threshold being lowered and the percentage rate is going up to 15% from the current 13.8% so you are also paying more. However, they have also increased the employment allowance for small employers to £10,500 from the current £5,000 which can soften the blow a little.
It was really interesting to see that my client's client will be actually saving money with five employees on an average monthly salary above the thresholds, so that is good news for them. However, when I did the exercise with another client with ten employees (with a couple who were below the threshold) they will be paying about £2,500 more next year.
"So, do you know how it will affect you?"
I'd be interested to hear from others about how many staff are on the payroll and whether they are mostly paid above or below the threshold and if your client will be paying more or less. For us as two directors in our own company, it makes no difference at all as we didn't use up our 5k allowance before anyway.
If you need help with working this out then why not arrange a hand-holding session with me and we can do the calculations together. You just need to know the average monthly pay for your staff from April next year to get an idea so you can plan accordingly.
I can imagine for some it may mean letting staff go or not being able to give a pay rise if you are struggling already to pay your wages bill.
Until next time ...
ALISON MEAD
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about the changes in employers' National Insurance and the increase in employment allowance, it may be a great idea to give me a call on 01604 217365 and let's see how I can help you.
Alison loves bookkeeping and supporting bookkeepers. She has been helping clients to be better bookkeepers in Sage 50 for over 24 years and has been Xero Accredited in accounts and payroll for a number of years too.
She specialises in a very unique hand-holding method of training, helping bookkeepers and business owners to use their accounts software as and when they need support in setting up and producing their invoices, reports and financial information.
Alison combines her role at Silicon Bullet with her Forever Living network marketing businesses and is often to be seen at business networking meetings as she likes to keep busy.
You know what they say: if you want something done well ask a busy person!
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