Did you know that employing apprentices next year could help your business save £10,000s on Employer National Insurance Contributions?

Read our article and use the Employer NI Calculator (below) to see how much you could save.

Chancellor of the Exchequor, Rachel Reeves MP,  announced a substantial increase in Employer National Insurance Contributions at the recent Budget, but there is an apprenticeship incentive that you probably don’t know about that could save your business £10,000s in staff costs. Employing apprentices not only brings fresh talent into your business but also offers significant financial benefits. One major advantage is the savings on Employer National Insurance (NI) contributions. Here’s how you can make the most of these savings…

The Financial Advantage: Employer National Insurance Savings

Employers in the UK are required to pay NI contributions for their employees. However, when you employ an apprentice under the age of 25, you’re exempt from paying Employer NI contributions on their earnings up to the Upper Earnings Limit. This can lead to substantial savings for businesses of all sizes.

The maths

Not only will Employer NI contributions increase in April 2025, but minimum wages for both apprentices and non-apprentices will rise too. Below, we show you how much you would pay a 40hr/week worker on minimum wage and the associated Employer NI contribution.

When employing apprentices under 25, you are exempt from the Employer NI contribution – saving over £3000 of an annual salary (for someone on National Living Wage).  This means investing in training for young staff with the raw attributes to succeed can save your business significantly. 

Employer National Insurance Calculator

Use the calculator below to see how much you’d save in Employer NI, by moving under 25s you employ onto an apprenticeship.

• Enter an annual wage in ‘Gross pay’
• Make sure you’re comparing Tax Year 2025-26 with 2024-25 (to see the increase)
• In the bottom right-hand box you’ll see total Employer NI saving you could make (and increase on the currrent financial year)

View from a trade association

Tracy Hewett, Head of Education and Training, at the Electrical Distributors’ Association (EDA), explains what an impact utilising this incentive could have on affiliate members the EDA supports.

“A lot of manufacturers and suppliers to the electrical wholesale market are experiencing significant skills gaps and struggling when trying to recruit experienced staff. However, some businesses are still not using apprenticeships to grow their own talent pool instead.

“By articulating incentives like this to employers clearly, and explaining the wider business benefits of apprenticeships (with our partner Supplytrain), more organisations are starting their apprenticeship journey. This is great news for the individual business, the individual apprentices and our sector as a whole.”