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The 2024 Autumn Budget announced increases to the national minimum wage and employer National Insurance contributions. These changes will come into effect on April 1, 2025.

So what does this mean for childminders?

Please note

If you are a childminder working alone, these changes will not affect you.

If you employ assistants or work with other childminders, you need to understand the changes and put those that apply to you in place from April 1st.

National minimum wage increases

• The National Minimum Wage for those aged 18–20 will increase to £10 per hour
• The National Minimum Wage for those for those aged 21 and over will increase to £12.21 per hour

Employer National Insurance Contributions (NICs)

• The rate of employer National Insurance Contributions will increase from 13.8% to 15%. This applies to those of you who employ assistants or childminders. If you have self-employed assistants, this doesn’t apply as your assistants are responsible for their own NICs. If you co- childmind where each of you have equal responsibility for the costs and profits involved in the business, e.g a husband and wife team, this won’t apply to you as neither of you are employed by the other and both of you will pay your own NICs through self-assessment.
• The per-employee threshold at which employers must pay NICs will decrease from £9,100 to £5,000 per year. This means that you will start paying Employer Contributions on each of your employees earnings over £5,000.

Employment Allowance

The Employment Allowance will increase from £5,000 to £10,500. The Employment Allowance is government assistance to help small businesses with the costs of employing staff because it reduces the amount of Employers Contributions you have to pay. The Allowance is for your business and not for each employee. This means that the first £10,500 will be covered by the Allowance, so you only pay what is due over this amount. It is predicted that most small businesses will actually be better off after April than now due to the increased Employment Allowance.

If you employ others and are not currently claiming your Employment Allowance, this govt. site explains how to claim.