voluntary organisations, social enterprises and volunteering
voluntary organisations, social enterprises and volunteering
voluntary organisations, social enterprises and volunteering
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Employer National Insurance contributions to cost Scottish voluntary sector around £75m
Created: 18/11/2024
News/Events Category: General News
The Autumn 2024 Budget introduced changes to the level of Employers’ National Insurance Contributions (NIC).
SCVO estimate that this will cost the voluntary sector in Scotland as a whole around £75m. Given the challenging financial context, any increase in costs will be hard for voluntary organisations to meet.
What are the changes?
- Employers will now start to pay NICs on any employee's earnings over £5,000 instead of the current £9,100 threshold
- The rate of National Insurance will increase from 13.8% to 15%
- There has however also been an increase in the Employment Allowance that employers can claim, rising from up to £5,000 to up to £10,500.
Will my organisation have to pay more tax?
The impact on your organisation will depend on how many staff you have and how much they are paid. Assuming you have employees earning average sector salaries:
- Most organisations with 1-5 paid staff members will likely end up paying the same or less national insurance contributions
- Most organisations with 6-10 paid staff members will likely see their total payroll costs increase by around 1-2%
- Organisations with more than 10 paid staff members will likely see their total payroll costs increase by 2-4%
There will be a disproportionate impact on sector employers with a large part-time workforce on lower wages - such as often seen in parts of the sector such as social care, childcare, leisure and retail.
What’s being done to mitigate the impact?
The UK Government has stated its commitment for the increased funding to enable public sector employers to meet these additional costs. However, there is no such commitment to the voluntary sector, despite being a significant provide of essential public services.
What now?
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