Autumn Budget 2025 Analysis: Employer NI, CGT, SDLT & Take-Home Pay Impact
Chancellor Rachel Reeves delivered the Autumn Budget on 30 October 2024. This analysis covers every major tax change — employer National Insurance rising to 15%, Capital Gains Tax aligned at 18%/24%, the SDLT additional property surcharge up to 5%, and the continuing freeze on income tax thresholds to 2028 — with take-home pay tables, employer cost breakdowns and links to our calculators.
Key changes at a glance
- Employer NI rate:13.8% → 15% from 6 April 2025
- Secondary threshold:£9,100 → £5,000 — employer NI starts earlier on lower wages
- Employment Allowance:£5,000 → £10,500 — protects smaller employers
- CGT (non-property assets):basic rate 10% → 18%; higher rate 20% → 24%
- CGT (residential property): rates unchanged at 18%/24%
- SDLT additional property surcharge:3% → 5% from 31 October 2024
- ISA allowance: unchanged at £20,000
- Income tax thresholds: frozen at 2021/22 levels until April 2028
Employer National Insurance: 13.8% to 15% with a lower threshold
The most significant cost-of-employment change in the Autumn Budget was the increase in the employer National Insurance rate from 13.8% to 15%, effective 6 April 2025. Simultaneously, the Secondary Threshold — the point at which employers start paying NI on an employee's earnings — was cut from £9,100 to £5,000 per year.
The combined effect is a double hit: a higher rate applied to a wider earnings base. For a typical full-time employee earning £35,000, the employer's annual NI cost rises by roughly £900per year. Across a ten-person business, that's nearly £9,000 of additional payroll cost — before any other wage pressure.
Why the secondary threshold cut matters
Before April 2025, employers only paid NI once an employee earned above £9,100 a year — roughly the level of a part-time worker doing around 20 hours per week at the National Living Wage. The reduction to £5,000 means employers now pay NI from a much lower earnings level. This particularly affects:
- Hospitality and retail businesses with large numbers of part-time and seasonal workers
- Small businesses and sole traders who employ one or two part-time staff
- Care sector employers, many of whom rely heavily on part-time workers
Workers earning between £5,000 and £9,100 (the old threshold) now generate employer NI costs for the first time, even if they do not pay employee NI or income tax themselves.
Employment Allowance doubled to £10,500
To partially offset the NI rises, the Employment Allowance was increased from £5,000 to £10,500 per year from April 2025. This allowance lets eligible employers reduce their total employer NI bill by up to £10,500. For a small business with total employer NI below £10,500, it means paying no employer NI at all.
The allowance is available to businesses and charities whose employer NI bill was less than £100,000 in the previous tax year. Single-director companies where the director is the only employee remain ineligible.
Employer cost per employee: before and after April 2025
The table below shows the total annual employer NI cost per employee at selected salary levels, comparing 2024/25 (old rules) and 2025/26 (new rules). These figures are gross employer NI only and exclude the Employment Allowance, which benefits different employers to different degrees.
| Employee salary | Employer NI 2024/25 | Employer NI 2025/26 | Annual increase |
|---|---|---|---|
| £10,000 | £124 | £750 | +£626 |
| £20,000 | £1,504 | £2,250 | +£746 |
| £30,000 | £2,884 | £3,750 | +£866 |
| £40,000 | £4,264 | £5,250 | +£986 |
| £50,000 | £5,644 | £6,750 | +£1,106 |
| £75,000 | £9,090 | £10,500 | +£1,410 |
2024/25: 13.8% above £9,100 secondary threshold. 2025/26: 15% above £5,000 secondary threshold. Figures rounded to nearest £.
See your exact take-home pay
Our take-home pay calculator includes the 2025/26 employer NI and income tax changes.
Open take-home pay calculator →Take-home pay in 2025/26: impact at key salary levels
Employer NI does not directly reduce employee take-home pay — it's paid on top of your salary by your employer. However, the income tax threshold freeze (continuing from 2021) does create gradual take-home deterioration through fiscal drag. As wages rise with inflation, more of your earnings fall into higher tax bands even when your purchasing power is static.
The table below shows approximate 2025/26 take-home pay figures for an English resident, employed, with no pension contributions or benefits in kind. It also shows the total cost of employing that person (salary plus employer NI at the new 15% rate from £5,000).
| Gross salary | Income tax | Employee NI | Take-home pay | Employer NI cost | Total employer cost |
|---|---|---|---|---|---|
| £25,000 | £2,486 | £997 | £21,517 | £3,000 | £28,000 |
| £35,000 | £4,486 | £1,797 | £28,717 | £4,500 | £39,500 |
| £50,000 | £7,486 | £3,017 | £39,497 | £6,750 | £56,750 |
| £75,000 | £17,432 | £3,557 | £54,011 | £10,500 | £85,500 |
| £100,000 | £27,432 | £4,057 | £68,511 | £14,250 | £114,250 |
England 2025/26. Personal allowance £12,570. Basic rate 20% to £50,270; higher rate 40% to £125,140. Employee NI: 8% on £12,570–£50,270, 2% above. Employer NI: 15% above £5,000 secondary threshold. Pension contribution, student loans and benefits in kind not included. Figures approximate.
Fiscal drag: the silent tax rise
The income tax personal allowance has been frozen at £12,570 since April 2021 and will remain there until April 2028. The higher-rate threshold is similarly frozen at £50,270. This is fiscal drag in action: as average wages rise with inflation and nominal pay increases, more workers cross into higher bands and those already there pay tax on a larger slice of income.
The OBR estimated that by 2027/28 around 3.7 million more people will be paying income tax, and around 800,000 more will have become higher-rate taxpayers, compared to if thresholds had risen with inflation. For a worker whose salary grows from £45,000 to £52,000 over the freeze period, the portion taxed at 40% grows — increasing their effective tax rate without any headline tax rise being announced.
Use our income tax calculator to model exactly how frozen thresholds affect you as your salary changes year on year.
Capital Gains Tax: rates rise sharply for investors
The Autumn Budget 2024 brought the most significant Capital Gains Tax changes in years. From 30 October 2024 — the day of the Budget itself — the main CGT rates on most assets (shares, investment funds, business assets not qualifying for Business Asset Disposal Relief) were increased:
| Asset type | Old basic rate | New basic rate | Old higher rate | New higher rate |
|---|---|---|---|---|
| Shares, funds, most assets | 10% | 18% | 20% | 24% |
| Residential property | 18% | 18% (unchanged) | 24% | 24% (unchanged) |
| Business assets (BADR) | 10% | 14% (from April 2025) | — | 14% (from April 2025) |
Residential property rates were already at 18%/24% following a previous reduction from 18%/28%, so they are effectively unchanged by this Budget. The big impact falls on investors who hold stocks and shares outside an ISA, fund investors, and business owners selling assets that do not qualify for full Business Asset Disposal Relief.
CGT impact for investors: illustrative examples
The table below shows the extra CGT cost for a higher-rate taxpayer on gains of different sizes following the October 2024 rate change (20% → 24% on most assets).
| Taxable gain | CGT at old 20% rate | CGT at new 24% rate | Extra cost |
|---|---|---|---|
| £10,000 | £2,000 | £2,400 | +£400 |
| £25,000 | £5,000 | £6,000 | +£1,000 |
| £50,000 | £10,000 | £12,000 | +£2,000 |
| £100,000 | £20,000 | £24,000 | +£4,000 |
| £250,000 | £50,000 | £60,000 | +£10,000 |
Higher-rate taxpayer. CGT Annual Exempt Amount of £3,000 already deducted from gain. Shares and funds (non-residential assets).
CGT planning after the Budget
With CGT rates now at 18%/24% across virtually all assets, the tax advantage of holding investments outside an ISA has been significantly eroded. Key planning considerations:
- Use your ISA allowance first:the £20,000 annual ISA allowance shelters all gains and income tax-free. Growth inside a Stocks & Shares ISA is now even more valuable with higher CGT rates.
- Bed and ISA:selling non-ISA investments and buying them back inside an ISA crystallises a gain at today's rates but protects all future gains. Do this within your annual ISA allowance.
- Spouse transfers:assets transferred between spouses/civil partners are CGT-free. Using both partners' Annual Exempt Amounts (£6,000 combined) and both basic-rate bands can substantially reduce the total CGT bill.
- Business Asset Disposal Relief: the rate on qualifying business disposals is 14% from April 2025 (rising further to 18% from April 2026), so timing business exits is now more important.
Calculate your CGT bill
Model different sale scenarios, income levels, and asset types with the 2025/26 CGT rates.
Open CGT calculator →SDLT additional property surcharge: 3% to 5% immediately
The Budget's most immediate change took effect the very next day: from 31 October 2024, the Stamp Duty Land Tax surcharge on additional residential properties (second homes, buy-to-let purchases) rose from 3% to 5%.
This surcharge is applied on top of the standard SDLT rates on the full purchase price. It applies regardless of property value, meaning even a £100,000 buy-to-let purchase sees an immediate extra 2 percentage points on every pound paid.
SDLT additional property: before and after examples
| Purchase price | Total SDLT before (3% surcharge) | Total SDLT after (5% surcharge) | Extra cost |
|---|---|---|---|
| £150,000 | £5,000 | £8,000 | +£3,000 |
| £250,000 | £10,000 | £15,000 | +£5,000 |
| £350,000 | £18,000 | £25,500 | +£7,500 |
| £500,000 | £30,000 | £40,000 | +£10,000 |
| £750,000 | £52,500 | £67,500 | +£15,000 |
England and Northern Ireland. Standard SDLT rates plus 5% additional property surcharge on full purchase price. Note: the SDLT nil-rate threshold for additional properties is £0 — the surcharge applies from the first pound.
There is no transitional relief for purchases that were agreed before the Budget but completed after 31 October 2024. If you exchanged contracts before Budget day but completed afterwards, the higher 5% rate applies. The only exception is where contracts were exchanged on or before 30 October 2024 and completed no later than the end of 2025 — these transactions may be eligible to claim relief at the old 3% rate.
Calculate stamp duty on your purchase
Our stamp duty calculator includes the updated 5% additional property surcharge and standard residential rates.
Open stamp duty calculator →ISA allowance and income tax: no change
Against expectations of possible ISA reforms, the Budget left the ISA allowance unchanged at £20,000 per adult per tax year. The Lifetime ISA limit of £4,000, the Junior ISA allowance of £9,000, and the 25% LISA bonus were all maintained.
Income tax bands and rates were also left formally unchanged, with the personal allowance staying at £12,570 and the higher-rate threshold at £50,270. The government confirmed the threshold freeze will continue until April 2028, as previously announced.
Fiscal drag note
With thresholds frozen and inflation driving wage growth, around 3.7 million more people are projected to pay income tax or enter higher-rate tax by 2028 purely due to nominal pay increases. Use the income tax calculator to see how your expected pay growth affects your tax bill over the next few years.
Who gains and who loses from the Autumn Budget 2024
| Group | Impact |
|---|---|
| Small employers (under ~7 employees) | Largely protected by doubled Employment Allowance (£10,500); net NI cost may be similar to or lower than before |
| Medium and large employers | Significant NI cost rise — 15% rate and lower £5,000 threshold add £900–£1,400+ per employee per year |
| Part-time workers (£5k–£9.1k wages) | Their employment now costs employers more from first day — potential impact on hiring and hours |
| ISA investors | No change to ISA allowance; CGT rise makes tax-free ISA wrapper even more valuable for non-property assets |
| Share and fund investors (non-ISA) | CGT rises from 10%/20% to 18%/24% — significantly higher tax on any realised gains outside an ISA |
| Buy-to-let investors and second-home buyers | SDLT surcharge up from 3% to 5% — £5,000–£15,000 extra upfront cost on typical purchases |
| Business owners (BADR) | BADR rate rises from 10% to 14% (April 2025) then 18% (April 2026) — timing of business sales now critical |
| Employees on frozen wages | No direct payslip change, but frozen thresholds mean fiscal drag increases effective tax rate each year wages rise |
Summary: Autumn Budget 2024 changes at a glance
| Change | Before | After | Effective date |
|---|---|---|---|
| Employer NI rate | 13.8% | 15% | 6 April 2025 |
| Secondary NI threshold | £9,100/yr | £5,000/yr | 6 April 2025 |
| Employment Allowance | £5,000 | £10,500 | 6 April 2025 |
| CGT — basic rate (assets) | 10% | 18% | 30 October 2024 |
| CGT — higher rate (assets) | 20% | 24% | 30 October 2024 |
| CGT — residential property | 18%/24% | 18%/24% (unchanged) | — |
| SDLT additional property surcharge | 3% | 5% | 31 October 2024 |
| ISA allowance | £20,000 | £20,000 (unchanged) | — |
| Income tax personal allowance | £12,570 (frozen) | £12,570 (frozen until 2028) | — |
| Higher-rate income tax threshold | £50,270 (frozen) | £50,270 (frozen until 2028) | — |
This article is general information, not tax or financial advice. Figures apply to 2025/26 UK tax year for England and Northern Ireland unless stated otherwise. Scotland and Wales have devolved income tax powers. If these changes materially affect your tax position, consider consulting a qualified accountant or tax adviser.
Frequently asked questions
When did the Autumn Budget 2024 changes take effect?
Most employment tax changes — the employer NI rate rise to 15% and the secondary threshold cut to £5,000 — took effect from 6 April 2025. The SDLT additional property surcharge increase from 3% to 5% was immediate from 31 October 2024 (the day after the Budget). The CGT rate changes also took effect from 30 October 2024. Income tax thresholds remain frozen at 2021/22 levels until April 2028.
Does the employer NI rise affect my take-home pay directly?
No — employer National Insurance is paid by your employer on top of your salary. It does not appear as a deduction on your payslip and does not directly reduce your take-home pay. However, it significantly increases the total cost of employing you, which can put downward pressure on pay rises, bonuses, and hiring. The Employment Allowance increase to £10,500 offsets much of this cost for smaller employers.
What are the new CGT rates from the Autumn Budget 2024?
From 30 October 2024, the main CGT rates on most assets (shares, funds, business assets) rose from 10%/20% to 18%/24%. Residential property rates stayed at 18%/24% — the higher residential rate was already 24% after a previous reduction from 28%, so those rates are unchanged. The CGT Annual Exempt Amount remains £3,000 per individual in 2025/26 and 2026/27.
How much does the SDLT surcharge increase cost on a £300,000 second property?
On a £300,000 second home or buy-to-let purchase on or after 31 October 2024, the additional property SDLT surcharge is now 5% (up from 3%) on every pound. On top of the standard SDLT bands, the total additional SDLT compared to buying a primary residence adds roughly £6,000 extra per £300,000 compared to the previous 3% surcharge (£6,000 vs £9,000 additional = £3,000 more than before). Use our Stamp Duty calculator for your exact figure.
What is fiscal drag and how does it affect me from this Budget?
Fiscal drag occurs when income tax thresholds are frozen while wages rise with inflation. You earn more in nominal terms, but because the bands haven't moved, more of your income crosses into higher tax brackets — even though your real purchasing power may not have improved. With thresholds frozen at £12,570 (personal allowance) and £50,270 (higher-rate threshold) until April 2028, HMRC estimates that over 3 million more people will pay income tax or higher-rate tax by 2028 purely due to wage growth. Our income tax calculator shows exactly how much this costs you.
Has the ISA allowance changed in the Autumn Budget 2024?
No. The ISA allowance was unchanged at £20,000 per adult per tax year. Rumours ahead of the Budget suggested the allowance might be cut or reformed, but Chancellor Reeves left it intact. The Lifetime ISA limit of £4,000 and the Junior ISA limit of £9,000 were also unchanged.
Who benefits from the Employment Allowance increase to £10,500?
The Employment Allowance allows eligible employers to reduce their employer NI bill by up to £10,500 per year (up from £5,000). It applies to businesses and charities with an employer NI bill below a certain threshold — single-director companies where the director is the sole employee remain ineligible. For a business with two or three employees, the doubled allowance largely or entirely offsets the impact of the higher 15% employer NI rate. For larger employers, the net impact is still a significant cost increase.
Calculators referenced in this analysis
Take-Home Pay Calculator
See your exact net pay after income tax and NI in 2025/26.
Income Tax Calculator
Model frozen threshold impact on your tax bill year by year.
Capital Gains Tax Calculator
Calculate CGT at the new 18%/24% rates on shares, property or other assets.
Stamp Duty Calculator
Calculate SDLT with the updated 5% additional property surcharge.