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Employer NI hike could hit wages

30-10-2024

Analysis by the Institute of Economic Affairs (IEA) think-tank suggests that an increase in employers’ National Insurance will likely end up making employees worse off. This comes amid speculation that Chancellor Rachel Reeves is planning to hike employer NI while also lowering the threshold at which businesses start paying the levy. The IEA says that if employers are hit with higher NI contributions, they may reduce wages to keep their employment costs at a certain level. It went on to warn that if firms reduce wages to cover the cost of a higher NI bill, tax receipts through other levies - such as income tax - would fall.

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