What changed
From April 2025, employer National Insurance contributions rose to 15%, and the threshold at which employers start paying fell to £5,000. For businesses, that means the cost of employing UK staff went up — not the headline salary, but the on-top cost every employer pays for every employee. For a workforce of any size, it adds up quickly.
What it means for the cost of hiring
The change widens an already significant gap. A UK employee was never just their salary — employer NI, pension, holiday, equipment and recruitment already pushed the fully-loaded cost of a £30,000 hire to around £40,000. The NI rise adds to that, making each UK hire a little more expensive again and each hiring decision a little weightier.
For SMEs watching margins, this matters most at exactly the point they're trying to grow — when they need more capacity but every UK hire now carries a slightly heavier cost and commitment.
Why it strengthens the offshore case
Dedicated offshore staffing was already substantially cheaper than UK hiring — typically 55-70% less on a fully-loaded basis. Changes that raise UK employment costs don't transform that maths, but they do sharpen it: the more expensive UK employment becomes, the larger the saving from a dedicated offshore hire, and the more compelling the option looks for the administrative, finance and back-office work that doesn't strictly require a UK presence.
It's worth being precise about what this does and doesn't mean. It doesn't make offshore staffing suddenly right for roles that need UK presence or a native phone manner — those considerations are unchanged. What it does is make the existing cost argument, for the large category of desk-based work that can be done excellently from anywhere, a little stronger again.
To see the saving for a specific role against the current fully-loaded UK cost, our savings calculator gives you the figure.