The Autumn Budget 2024 announcement gave estimating teams a specific reason to revisit labour costs for work taking place in 2025. Employer National Insurance was changing from 6 April 2025, including the main secondary Class 1 rate and the annual secondary threshold.
The estimating implication was not a universal uplift on the contract sum. The effect depended on the employment arrangement, earnings profile and the employer’s circumstances.
For directly employed resources, the payroll basis needed review. For subcontract work, the question was whether the supplier’s quotation already reflected the change. Applying an internal labour uplift to a subcontract price that had already been revised could count the impact twice.
| Measure | Before | From 6 April 2025 |
|---|---|---|
| Secondary Class 1 rate | 13.8% | 15% |
| Annual secondary threshold | £9,100 | £5,000 |
Selected headline changes. Employment Allowance, employee categories and other rules affect the actual employer cost.
Separate an announced change from a priced commitment
An estimator working before April needed to know when the labour would be used. A short package completed before the change and a longer package continuing into the new tax year could have different exposures.
The enquiry should therefore state the proposed period of work and ask suppliers to confirm their pricing basis. Internally, keep the labour-resource calculation available for review rather than hiding the adjustment inside a composite rate.
The headline changes were useful context, but payroll and tax specialists should establish the actual employer treatment. The estimating team’s role is to carry that agreed cost basis into the right quantities and periods, then make sure it is included once.