Make Savings for your Business

Many employers were concerned about April's rise in employer national insurance contributions from 13.8% on salaries over £9,100, to 15% on salaries above £5,000. But did you know, if your apprentice is under 25, on an approved apprenticeship, and earning below the specified threshold, you will not have to pay employer National Insurance contributions on their earnings. This can lead to significant cost savings for your business.

For example: If you employ or recruit someone under 25 on a £20,000 salary and put them on an apprenticeship, you will save £2,250 in annual NI contributions (the saving ends on their 25th birthday) . For an apprentice on £25,000, the saving is £3,000 a year.

An employer generally does not have to pay Class 1 National Insurance contributions for apprentices under the age of 25, provided certain conditions are met. These are the key conditions for the National Insurance exemption:

Age: The apprentice must be under 25 years old. This applies from the start of their apprenticeship. The exemption ends on their 25th birthday.

Approved Apprenticeship: The apprentice must be on an approved UK government apprenticeship standard or framework (like the ones Swarm provides). These can differ slightly depending on whether the apprenticeship is in England, Wales, Scotland, or Northern Ireland. In England, apprenticeship frameworks have largely been replaced by apprenticeship standards since 2020, and new apprentices should be on a standard.

Earnings Threshold: The apprentice's earnings must be below the Upper Secondary Threshold (UST) for apprentices, which for the 2024/2025 and 2025/2026 tax years is £967 per week or £50,270 per year. If the apprentice earns above this, employer National Insurance contributions will be payable on the earnings above this threshold.

The NI exemption applies when using apprenticeships to train up new recruits AND existing staff.

Do get in touch if you’d like to know more.