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Is Your Remuneration Strategy Ready for the 2026 Tax Changes?

The Autumn Budget introduced significant changes that will impact how business owners and employers manage pay and payroll costs. With dividend tax rates increasing from April 2026, income tax thresholds frozen until 2031, and new rules on employer National Insurance, now is the time to review your remuneration strategy.



What’s Changing?

Dividend Tax Increase (April 2026)
Basic and higher-rate dividend tax rates rise by 2 percentage points.

Employer National Insurance Contributions (NICs)
Employer NIC rate rises to 15% from April 2025, increasing payroll costs.

Employment Allowance
Increased to £10,500 per year from April 2025 (up from £5,000), and the previous £100,000 NIC cap has been removed—making more businesses eligible.
Action: Ensure you claim this allowance to reduce NIC costs.

Salary Sacrifice Pension Contributions
From April 2029, NIC relief capped at £2,000 per employee per year.

Minimum Wage Increase (April 2026)
£12.71/hour for 21+, £10.85/hour for 18–20, £8/hour for under 18/apprentices.



Why Act Now?

These changes will:

Increase the cost of employing staff.

Reduce the tax advantage of dividends and salary sacrifice.

Require careful planning to maintain profitability and compliance.



Next Steps

We recommend booking a Remuneration Strategy Review with our team. We’ll help you:

Assess the impact of NIC and dividend tax changes.

Model salary vs dividend vs pension contributions.

Plan for wage increases and NIC costs.

Optimise your approach before April 2026.