Employers DO NOT Pay National Insurance for Apprentices Under 25*

Employers DO NOT Pay National Insurance for Apprentices Under 25* – Here’s What you Need to Know …

If you’re an employer considering hiring apprentices, there’s good news – you won’t need to pay National Insurance contributions (NICs) for apprentices under the age of 25, provided certain conditions are met. This exemption – applicable to new apprentices and upskilling current employees – can significantly reduce employment costs while allowing businesses to invest in our next generation of young professionals and support important CPD opportunities.

Understanding the National Insurance Exemption:

 Employers normally pay Class 1 National Insurance contributions on their employees’ earnings above a certain threshold. However, under government legislation, apprentices under the age of 25 are exempt from these contributions, provided they meet the following criteria:

• They must be on an approved apprenticeship scheme.
• They must earn below the Upper Secondary Threshold of less than £50,270 per year (£967 per week – 2024/25 tax year).

This exemption applies to the employers NI contributions only. Apprentices will still pay their own NI contributions based on their earnings.

If an apprentice meets this criteria, employers are entirely relieved of Class 1 NICs on their earnings. For businesses of all sizes, this can represent a significant cost-saving opportunity, making apprenticeships an even more attractive recruitment strategy to invest in.

How Much Can Employers Save?

For employees over the NI threshold, employers currently pay 13.8% in National Insurance contributions. Following the October 2024 Budget, this is set to rise to 15% from April 2025  – as well as the threshold at which employers begin paying NI contributions, will decrease from £9,100 to just £5,000 per annum.  By not having to pay this for apprentices under 25, businesses can save thousands of pounds per year, depending on the apprentice’s salary.

For example:

• If an apprentice earns £20,000 per year, the employer would normally pay approx £1,656 in NI contributions (increasing to £2,250 from April 2025). With the exemption, this cost is completely removed.

Other Employer Benefits of Hiring Apprentices:

Beyond NI savings, employers can also take advantage of:

• Apprenticeship Levy funds (for large employers) or government funding (for smaller businesses).
• Additional grants for hiring apprentices.
• A highly skilled workforce tailored to business needs.

These initiatives are designed to make it easier and more affordable for businesses to nurture the next generation of skilled workers.

By taking advantage of the National Insurance exemption and government support, employers can develop a loyal and highly skilled workforce at a reduced cost.

If you’re looking for a cost-effective way to grow your team, hiring apprentices is a win-win solution worth exploring #chooseanapprentice

To find our more information about the benefits of hiring an apprentice that is relevant to your business, contact the team at EMA Training who will be very happy to explore this with you. Call us on 01332 371 666 or email [email protected]

EMA Training specialise in quality over quantity with apprenticeships in these key areas: Accounting and Payroll, Marketing, and Data and Technology. If we don’t deliver an apprenticeship in the subject you are considering, we’re more than happy to point you in the direction of a good provider.