// NEWS //
Businesses absorb NI increase as costs return to pre-hike levels, data shows
While the April spike reflects the initial shock of the higher NI contributions, May’ s figures suggest businesses are finding ways to manage their employment costs rather than settling for a permanent increase, without passing the burden onto employees.
While the exact steps businesses are taking to absorb costs aren’ t fully clear, PayFit’ s Chief People and Fulfilment Officer, Marie-Alice Tantardini, suggests the rise in employer NI contributions are prompting employers to explore different ways to reassess how they both manage their expenditure and maintain employee value.
British businesses are absorbing the impact of the government’ s NI increase, with employer contributions briefly rising in April before returning to pre-hike levels in May.
This is according to PayFit’ s analysis of over 600 SMEs which shows the average monthly NI expenditure per company jumped from £ 40,892 in March to £ 44,885 in April, with May data revealing average per-company costs dropping to £ 40,500.
“ Our analysis suggests businesses aren’ t just accepting higher costs, they’ re adapting to them. Salary sacrifice is one clear option, as it helps to lower NI contributions while still benefitting employees. Some companies may also be reshaping benefits, introducing tax-efficient perks like cycle-to-work schemes or EV incentives, while others might be refining workforce structures to balance costs without impacting salaries,” said Tantardini.
Figures from PayFit also suggest SMEs could be offsetting higher employer NI contributions by increasing the amount of benefits they pay out to employees.
Guidelines published to help industry comply with EU AI Act
The European Commission has received the final version of the General-Purpose AI Code of Practice, a voluntary tool developed by 13 independent experts, with input from over 1,000 stakeholders, including model providers, smalland medium-sized enterprises, academics, AI safety experts, rightsholders and civil society organisations.
The code is designed to help industry comply with the AI Act’ s rules on general-purpose AI, which will enter into application on August 2, 2025. The rules become enforceable by the AI Office of the Commission one year later as regards new models and two years later as regards existing models. This aims to ensure that general-purpose AI models placed on the European market – including the most powerful ones – are safe and transparent.
The code consists of three chapters: Transparency and Copyright, both addressing all providers of general-purpose AI models, and Safety & Security, relevant only to a limited number of providers of the most advanced models.
Once the code is endorsed by the Member States and the Commission, providers of general-purpose AI models who voluntarily sign the code will be able to demonstrate compliance with the relevant AI Act obligations by adhering to the code. In doing so, signatories to the code will benefit from a reduced administrative burden and increased legal certainty compared to providers that prove compliance in other ways.
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