Cost & Risk
The Budget Didn't Raise Employer NI. Wages Still Rise.
29 October 2026 · James Townsend-Rose
If you spent Wednesday waiting for one sentence about employer National Insurance (the tax you pay on top of every salary), you can ease off a little. Chancellor John Healey's first Budget made no increase to the headline rates of income tax, National Insurance or VAT, so the employer rise of April 2025 doesn't get a sequel. Your wage bill still climbs, though, and it's worth knowing why before you set next year's hiring plan.
What stays the same
Employer National Insurance stays at the 15% introduced in April 2025, charged on each employee's pay above £5,000 a year. That threshold is frozen until 2030/31, according to Macfarlanes' review of the 2025 Budget. It isn't relief, either. Personnel Today reported no sign of any cut to what employers already pay.
Retail, hospitality and leisure businesses in England do get something. Their business rates are frozen in real terms for two years, and the relief ceiling for small properties rises from £12,000 to £18,000, which takes around 70,000 more businesses out of business rates altogether.
What still goes up
The National Living Wage rises 3.9% to £13.21 an hour from 1 April 2027, the Government confirmed on Wednesday. For a full-time worker on the minimum, that is about £910 more in gross pay a year. Employer National Insurance at 15% lands on top of it, which adds more than £135 per head before anything else changes. For many firms it lands on a wage bill already growing faster than revenue.
The 18 to 20 rate moves to £11.27 as well. If anyone on your team is paid just above the minimum, check where their pay sits against the new floor before April, not after.
The backdrop matters too. The government's official forecaster, the Office for Budget Responsibility, expects inflation to peak at 3.8% in early 2027 and not to return to its 2% target until the third quarter of 2028. Pay and prices are both climbing into the year ahead.
What it means for your hiring plan
Of course, a UK hire is still the right call for plenty of roles. But the experienced people who make the biggest difference are usually the hardest to land, and with pay floors rising they cost the UK payroll more each year. Price every planned role at April 2027 rates now, then ask whether a dedicated team member, a UK-aligned professional based in South Africa and employed for you, would get you the right person within budget, with the employment risk off your plate. A wrong hire is expensive enough in a good year, so run the numbers both ways before the offer goes out.
One more for the founders themselves. From 6 April 2027, a new Founders' Relief charges 10% Capital Gains Tax on up to £10 million of lifetime gains, while the existing relief for selling a business shrinks to the first £500,000, as Forvis Mazars sets out. The same Budget doubles the limit on tax-advantaged company share options to £120,000, which gives you more room to pay senior hires partly in equity. Eligibility is tight and a consultation is still open, so check with your accountant before building a plan around it.
We pointed at the 2027 living wage rise before the Budget. Now it has a number and a date.
FAQ
Did the Autumn Budget 2026 raise employer National Insurance?
No. The Budget document confirms no increase to the headline rates of income tax, National Insurance or VAT. Employer National Insurance stays at the 15% introduced in April 2025.
What is the National Living Wage from April 2027?
£13.21 an hour for workers aged 21 and over, up 3.9% or 50p, from 1 April 2027. The rate for 18 to 20-year-olds rises to £11.27.
What does the National Living Wage rise cost an employer?
The Government puts it at about £910 more in gross pay a year for a full-time worker on the minimum. Employer National Insurance at 15% on that extra pay adds more than £135.
Is the Budget good or bad for hiring?
Mixed. Payroll tax avoids a second shock, but the wage floor keeps rising and inflation is forecast to peak at 3.8% in early 2027. Price roles at April 2027 pay rates, and compare a UK hire with a dedicated team member based in South Africa before you commit.
What is Founders' Relief?
A new Capital Gains Tax rate of 10% on up to £10 million of lifetime gains for qualifying founders, from 6 April 2027. Tight eligibility tests apply, so speak to your accountant.
Sources
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