Update software 

If you use cloud based payroll software, it may auto update for you. If the software is server/desktop based, it is important to check that the version in use is updated to the latest version.

Employers’ national insurance

Employers will now pay 15% in secondary NICs, and the threshold at which they must start paying secondary NICs will now be £5,000, a huge drop from £9,100, which has been in place for the last three tax years.

Employers need to review their eligibility to claim the employment allowance (EA) in 2025-26, which, from the new tax year, is available to more employers than ever since the £100,000 threshold for claiming the allowance has been removed.

The amount employers can claim has increased to £10,500 (from £5,000) in the new tax year. However, you do need to ensure you comply with the rules around linked companies, so if you are part of a group, check that you don’t claim for multiple allowances across the connected companies.

New neonatal entitlement

The new statutory neonatal care leave and pay policy started on  6 April 2025, giving parents and caregivers more flexibility if their baby requires neonatal care after birth.

Currently, parents are finding themselves having to choose between taking the short period of parental leave that they are entitled to either when the baby is in neonatal care or working through that period until the baby is able to go home.

National minimum wage and salary sacrifice

This year will see another healthy increase in the minimum wage rates, and while that is great news for some employees, it brings additional considerations for payroll professionals. The rate if you are 21 or over is £12,21 per hour.

Ensure that employees with salary sacrifice agreements have post salary sacrifice pay over the minimum wage and that no other deductions are impacting NMW compliance.

Please remember that new rates of the NMW for 2025 come into effect for pay reference periods starting on or after 1 April. This means that some workers may not receive the new NMW rates from 1 April. An example of this would be a weekly payroll, where the pay reference period runs from a Saturday to a Friday. For the period that runs from:

• Saturday 30 March – Friday 5 April: The new NMW would notbe payable
• Saturday, 6 April – Friday, 12 April: The new NMW would be

Employers can always go over and above the regulations if they so wish, so the new rates can be paid from 1 April.