It's that time of the year when employment law changes traditionally take effect, and this year there have been significant increases in several rates and limits. Here is our summary of the most important changes taking effect this month in NI.
Employers in Northern Ireland should take note of the upcoming annual changes to statutory payment limits. Changes are implemented to reflect changes in the Retail Prices Index (RPI) and a range of increased figures will come into effect from 6 April 2025. Some rates are determined by Westminster, whilst others are specific to Northern Ireland.
Below, we outline the new rates and limits that apply in the 2025/26 financial year.
Family leave rates
The weekly rates for various statutory payments related to family leave will increase. A new rate of £187.18 (up from £184.03) will apply to the following types of leave:
- Statutory Maternity Pay (SMP)
- Statutory Paternity Pay (SPP)
- Statutory Shared Parental Pay (ShPP)
- Statutory Adoption Pay (SAP)
- Statutory Parental Bereavement Pay (SPBP)
Statutory Sick Pay (SSP)
The weekly rate for SSP will increase to £118.75 per week (up from £116.75 per week). In addition, the lower earnings limit, which determines eligibility for SSP, will rise to £125 (from £123).
In Great Britain, the new Employment Rights Bill will make SSP payable from day 1 of sickness and for the first 3 Qualifying Days of sickness. In addition, the lower earnings limit will be removed and will give those earning less than this, the right to SSP at a rate of 80% of weekly earnings. These changes are also likely to implemented in Northern Ireland.
Minimum wage rates
The national living wage rate for those age 21 and over will increase to £12.21 per hour. For those 18-20 the rate will be £10.00 per hour. Finally, for those 16-17 (and apprentices) the rate will be £7.55 per hour.
National Insurance contributions
As has been highly publicised, employers' National Insurance Contributions will rise from 13.8% to 15%. Additionally, the threshold at which employers start paying National Insurance on an employee's salary will be lowered significantly from £9,100 to £5,000.
What is specific to Northern Ireland?
Annual adjustments specific to Northern Ireland are the responsibility of the Department for the Economy. The changes have been implemented by way of The Employment Rights (Increase of Limits) Order (Northern Ireland) 2025. Similarly, these adjustments take effect from 6 April 2025.
Statutory redundancy
The maximum limit for Statutory Redundancy Payments will increase as follows:
- Weekly limit: £749 (up from £729)
- Maximum Statutory Redundancy Payment payable: £22,470 (this is also the new maximum basic award for unfair dismissal)
It is worth noting that the capped weekly pay amount is used in calculating statutory redundancy payments, so the increase is of particular relevance to businesses who are in the process of restructuring their workforce, which may apply to a number of businesses in the current economic climate. When determining which cap applies in relation to a dismissal, the relevant date is typically, but not always, the date upon which employment effectively ceased.
Unfair dismissal – compensatory award
The compensatory award limit for unfair dismissal claims will also be adjusted. The new limit will be £118,455.
What do changes mean for employers?
Beyond the obvious increase in costs, the new NMW rates in particular pose some particular challenges for employers. We wrote in more detail about this here.
The impact of these rises on employers in Northern Ireland may be significant. Many may need to rethink their operational strategies to manage the financial impact, focusing on more efficient resource use and possible restructuring. Small and medium-sized enterprises (SMEs), which make up a large part of Northern Ireland's business community, are likely to be especially affected. Many may be unable to absorb these increases, leading some to pause growth plans and recruitment.
Employers should ensure that they are prepared for all of the above changes and update their payroll systems accordingly.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
