Enterprise Nation launches National Insurance calculator to help small businesses navigate new tax responsibilities

With employment costs set to soar for some UK firms this month, Enterprise Nation has developed an interactive National Insurance (NI) calculator to help them navigate complex new tax responsibilities.

From 6 April, NI rates go up by 1.2 percentage points and thresholds go down from £9,100 to £5,000, adding extra costs onto most payrolls.

An Enterprise Nation analysis found in some cases, small businesses will now have to pay up to 100% more National Insurance (NI) tax to employ staff – for example in busy high street shops, despite the increase in the employment allowance.

By stark contrast, a small ecommerce business with fewer employees but paid at a slightly higher rate will see NI increases of around 17%. For many business structures it will be a balance of the two. In some instances, 100% of the NI increases will be offset by the increase in employment allowance.

The free calculator has been developed by in partnership with independent tax specialist Paul Tomlinson of On the Spot Accountants and is designed to help businesses calculate the new cost of NI, with some suggestions around how to mitigate their impact.

Emma Jones CBE, founder and CEO of Enterprise Nation, said:

“As new employer tax responsibilities come into force, it’s clear every business will have a very different set of complex calculations to make.

“Entrepreneurs are always resilient - but they need help to navigate the road ahead and start dealing with the implications of these rises - there’s no easy way around this.

That’s why we built this calculator – to create somewhere all small firms can easily get answers as well as support.”

Tax accountant and Enterprise Nation adviser Paula Tomlinson, founder of On the Spot Accountants, said:

“It’s impossible to know the impact of the employers’ NI increase on your small business without running your numbers; the percentage changes in your tax cost might be NIL% or 120% or more.

“The calculator will help businesses understand the impact so they can plan and adjust, helping businesses ensure they are sustainable for the long term.”

Tips to mitigate employment cost rises

Apart from reviewing pay and bonus structures, employee productivity or freezing hiring, employers can take the following actions to mitigate the financial impact of the rising cost of employment:

• Take advantage of the enhanced Employment Allowance: This is a no-brainer for eligible employers, especially since the removal of the £100,000 eligibility cap and the increased allowance amount in 2025/26.

• Salary sacrifice schemes: Encouraging employees to trade part of their salary for non-cash benefits like pensions, childcare vouchers, or cycle-to-work schemes will help reduce the NI bill for both employer and employee.

• Invest in technology: Adopting tech solutions can enhance productivity and reduce reliance on manual labour, especially for repetitive tasks. Although this will require upfront investment, it can lead to long-term savings

• Price increases: Many may resist considering this option, but market conditions may make it inevitable to raise prices for products or services to absorb the increased NI costs.

• Plan and budget: Identify key skills gaps critical to business growth and consider which roles can support these needs. Use free tools to hire specifically aimed at small firms like Talent Hub. This proactive approach will help avoid “panic hiring”, allowing firms to stick to a well-thought-out plan that aligns with business objectives.

• Leverage the gig economy: To tap into the gig economy effectively, start by clearly defining the specific skills and expertise needed for projects. However, remember to balance cost-saving measures with the potential impact on existing employee morale and operational efficiency.

• Explore apprenticeships and internships: Investing in apprenticeship and internship programmes can be a cost-effective way to bring in fresh talent. These programmes allow firms to nurture young talent who can grow alongside the business, providing founders with new perspectives while keeping hiring costs manageable. Check out innovative ways to hire university student and graduates via Talent Hub.

• Embrace flexible work opportunities: Consider remote, temporary or part-time working arrangements to help control employment costs. Embracing remote work can not only attract candidates seeking flexibility but also reduce overhead costs associated with office space. By offering remote positions, firms can tap into skilled professionals from across the country.

Access the Employer National Insurance calculator here:

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