National Living Wage Increase and Employer’s National Insurance: How the 2025 rise will impact you

Our mission at Zen is to help put money back into the education sector. This means ensuring teaching staff are always informed of how pay works, whether you work with Zen or not. 

In April 2025, there are two legislative changes that will impact your pay:

1. Employer’s National Insurance Contribution (NIC) rates will rise; and
2. The National Living Wage (NLW) is increasing. 

In this article, we explain:

• What the changes are;
• What this might mean for you; and
• If you work with Zen, what we are doing to make sure your pay is not negatively impacted.

What are the changes?

• The NLW is increasing, as it does every year on 1 April;
• Employer’s NIC will increase from 13.8% to 15% from April 2025; and
• The level at which employers start paying NICs will reduce from £9,100 to £5,000.

What does this mean for you?

If you are paid through an umbrella company, employer’s NICs are included in your gross pay rate. This is part of how umbrella companies enable you to work through multiple agencies and still get taxed correctly.

The rise in employer’s NIC means that if you are paid through an umbrella company, the employer’s NICs deducted from your gross pay will increase. If Zen or an agency you work through does not increase your gross pay rate, you will see a drop in your take-home pay because:

• The employer’s NIC deduction from your gross pay will increase by 1.2%; and
• The employer’s NIC deduction will kick in earlier, due to the reduction in the threshold.

But don’t worry - Zen Educate is adjusting your pay rate accordingly from 1 April 2025.

What will change in your pay rate?

1. Your gross pay rate will increase so that it is in accordance with NLW; and
2. Your gross pay rate will be further increased to offset any effects from the rise in Employer NICs. 

Your gross rate will be adjusted automatically in the Zen app - there is no action needed at your end.

If you have any questions regarding this, please complete this form. The team will aim to respond within 2-3 working days.

Not currently working with Zen?

If you're not currently working with Zen and are interested in discussing how these changes might impact your current take-home pay, we’d love to help! Click here to create an account with us.

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