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April pay reviews: navigating NICs, CPI, AEI, and the risks of a BFZ

Writer: Chris BarrowChris Barrow
3 days ago1 min read


Some choices on pay reviews in April - definitions first:


  • NIC = Rachel Reeves' increase in Employer's National Insurance payments;

  • BFZ = Big Fat Zero (a pay freeze)

  • CPI = Consumer Price Index (up around 3.50% in the last year)

  • AEI = Average Earnings Index (for private sector workers - up around 6.60% in the last year);


Option 1 - BFZ + NIC - maybe a couple of percent to your overall payroll costs.


Option 2 - CPI + NIC - again , probably around a 5.00% increase to your overall payroll costs.


Option 3 - AEI + NIC - that could easily add 8.00% to 9.00% to your overall payroll costs.


I respectfully suggest that:


  1. Whatever you do, the NIC will go unregarded by your team. It's just tax.

  2. Option 1 will go down like a fart in a spacesuit.

  3. Option 3 is very generous, will probably be appreciated but the extent of your generosity will most likely not be understood.

  4. Option 2 is looking favourite - inflation.

 
 
 

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