Employment rates and limits in effect in April

Every year in April significant changes in statutory rates and limits take effect, impacting various aspects of employment and benefits. Here's the key information you need.

Pay and wages

From 1 April 2025, the National Living Wage (payable to workers aged 21 and above) went up from £11.44 to £12.21 an hour.

The National Minimum Wage for 18- to 20-year-olds went up from £8.60 to £10.00 an hour.

The apprentice rate and the rate for those under 18 years old was also increased - from £6.40 to £7.55 an hour.

National Insurance contributions

From 6 April, the National Insurance (NI) rate paid by employers rose from 13.8% to 15%. Additionally, the threshold at which employers start paying NI on a worker's earnings is now reduced from £9,100 a year to £5,000. To support smaller businesses, the employment allowance is raised from £5,000 to £10,500.

Statutory rates

From 6 April 2025 the following increases in statutory payments are in force:

• The weekly rate of SSP increased to £118.75
• The weekly rate of SMP, maternity allowance, SPP, ShPL pay, neonatal care pay and parental bereavement pay is £187.18
• The lower earnings limit (the weekly earnings threshold for qualifying for all of these payments other than maternity allowance) is £125. The lower earnings limit for maternity allowance will remain at £30 a week.

Tribunal compensation limits

When the ‘appropriate date’ for the cause of action (such as the effective date of termination in an unfair dismissal claim) is on or after 6 April 2025, the following compensatory awards apply:

• The limit on a week's pay is £719. A week's pay is used to calculate statutory redundancy payments, the basic award in unfair dismissal claims and other awards
• The maximum compensatory award for unfair dismissal is £118,223
• The minimum basic award for certain unfair dismissals (including health and safety dismissals) is £8,763; and
• The limit on the compensatory award for a failure to have a written policy on allocating tips, or for a failure to allocate and pay tips fairly is £5,135.

Injury to feelings awards

The new rates that apply to all claims presented on or after 6 April 2025 are:  

Lower band: suitable for one-off and isolated incidents which are considered to be less serious = £1,200 to £12,100

Middle band: suitable for cases that do not merit an award in the upper band = £12,100 to £36,400

Upper band: suitable only in the most serious cases such as where there has been a lengthy campaign of harassment = £36,400 to £60,700, with the most serious cases capable of exceeding £60,700.

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