Businesses absorb NI rise as costs return to pre-hike levels, data reveals

British businesses took on the cost of the Government’s national insurance (NI) rise in April, with employer contributions jumping from £40,892 in March to £44,885 in April, according to PayFit data. 

Analysis of over 600 small and medium-sized enterprises (SMEs) showed that by May, employer NI costs dropped back to £40,500.

The data showed businesses acted fast to handle the increase, rather than locking in higher costs or passing them onto staff. 

Marie-Alice Tantardini, chief people and fulfilment officer at PayFit, said: “Our analysis suggests businesses aren’t just accepting higher costs – they’re adapting to them. 

“Salary sacrifice is one clear option, as it helps to lower NI contributions while still benefiting employees. 

“Some companies may also be reshaping benefits, introducing tax-efficient perks like cycle-to-work schemes or EV incentives, while others might be refining workforce structures to balance costs without impacting salaries.”

Figures from PayFit also showed average per-company benefit payments rose from £2,861 in January and £2,798 in February to £3,095 in April and £3,407 in May. 

March saw a spike to £6,853, likely due to end of financial year adjustments.