By Jonathan Mercer,
HR whizz and East London publican

As if hospitality hasn’t taken enough sucker punches over the last few years—sky-high costs, post-COVID chaos, Brexit making everything ten times harder, and energy bills that look like phone numbers—now, just to top it all off, National Insurance (NI) is going up in April. Nice one.

Look, I get it. NI funds essential services, and this country has been on its arse for well over a decade. This isn’t about dodging what we owe. But when businesses are shutting down left, right, and centre, and the cost of keeping the doors open feels like a never-ending uphill battle, we’ve got to be smarter, faster, and sharper than ever.

It’s not just operators feeling the squeeze—your team is struggling too. Rent, food, transport—everything costs more, and people are stretched thin. Looking after your staff isn’t just the decent thing to do—it’s smart business. Happy, supported teams stay longer, work harder, and deliver better service.

The ones that survive won’t be the biggest or the richest. They’ll be the ones who know their options and make the right moves before it’s too late.

So here’s how you cut costs, keep your team happy, and make the NI hike sting a little less.

1. Claim Your £10,500 NI Allowance

If your total NI bill is under £100,000, you can shave £10,500 off your Employer’s NI through the Employment Allowance.

• Who’s eligible? Businesses with Employer NI contributions under £100k per year across all PAYE employees.
• What does it do? Instantly knocks up to £10,500 off your NI bill. That’s real money back into your business.
• How do you claim it? Apply via your payroll software or through HMRC’s PAYE system. If you outsource payroll, check they’ve done this—you’d be shocked how many don’t.

If you qualify and aren’t claiming it, you’re literally giving money away.

2. Salary Sacrifice: Convert NI into Perks Instead of Tax

Salary sacrifice lets you cut employer NI costs while giving staff actual benefits. Instead of a straight wage increase (which bumps up your NI bill), let employees swap part of their salary for perks they actually want.

Always check with an accountant to stay compliant, but here are the best options:

• Uniforms & equipment – Specialist shoes, knives, uniforms—tax-free.
• Pension contributions – Instead of a pay rise, boost pensions. You both save on NI.
• Tech schemes – Laptops, phones, tablets, all tax-efficient.
• Cycle to work scheme – Employees buy a bike through gross salary, reducing NI.
• Childcare vouchers – Up to £55 per week can be salary sacrificed, cutting taxable income.
• Electric vehicle (EV) schemes – Lower Benefit in Kind tax rates mean cheaper staff EV leases.
• Health plans – Private healthcare, dental, and mental health support, all tax-efficient.

If you’re not offering this, you’re overpaying on NI.

3. Use Tronc & Service Charges Correctly

If your service charge is being taxed as wages, you’re throwing money away.

• Keep Tronc separate from base pay – No employer NI, instant savings.
• Stay compliant – New tipping laws mean transparency is key, but if done right, staff take home more while you save on tax.

Done properly, this can save your business thousands every year.

4. Offer TOIL Instead of Taxed Overtime Pay

Instead of paying overtime and stacking up NI costs, offer Time Off In Lieu (TOIL).

• Staff still get rewarded, but instead of NI-heavy overtime, they bank a day off.
• Great for covering quieter periods without hiring extra staff.

This keeps payroll tax down while keeping staff happy.

5. Be Smart About Pay Rises (Bonuses Over Permanent Increases)

A permanent salary increase means a permanently higher NI bill. Instead:

• One-off bonuses – Still taxed, but doesn’t inflate your payroll long-term.
• Profit-sharing – Reward staff when times are good, without committing to higher base salaries.
• Commission & upsell incentives – If they bring in more revenue, reward them through sales-based perks instead of wage hikes.

This way, staff get rewarded without your NI bill spiraling.

6. Hire Fewer, Better Staff Instead of Overstaffing

More bodies on the payroll doesn’t mean better service—it just means higher NI costs.

• Invest in quality over quantity – A skilled, efficient team costs less in the long run than hiring excess staff just to fill shifts.
• Pay a little more for the right people – Fewer hires, lower payroll bloat.
• Train multi-skilled staff – The more they can do, the fewer people you need.

It’s not about hiring more—it’s about hiring better.

7. Retain Staff! (Because Recruitment is Expensive)

Losing good employees costs more than keeping them.

• Pay fairly & offer real perks – Replacing staff is always more expensive than retaining them.
• Give responsibility & growth opportunities – People stay when they see a future.
• Use retention bonuses – Reward loyalty, not just new hires.

Even a 10% drop in staff turnover can save thousands in recruitment, additional wages covering vacancies and training costs.

8. Use Apprenticeships & Government Training Schemes

Even if you don’t pay the Apprenticeship Levy, you can still get government funding to train your team.

• Hire apprentices – In some cases, the government covers up to 100 percent of training costs.
• Use free training schemes – Check out The Skills Toolkit and Local Growth Fund.
• Apply for grants – Some councils offer wage subsidies for training.

If you’re paying for training out of pocket, you’re missing out on free money.

FINAL THOUGHT: Roll With the Punches, Stay in the Fight

Look, the NI hike is just another kick in the teeth, another pothole on the already knackered road we call hospitality. But the ones who make it through won’t be the flashiest, the biggest, or the ones throwing money at the problem and hoping for the best. They’ll be the ones who think smart, act fast, and refuse to get mugged off by a broken system.

• Salary sacrifice & NI allowances → Keep more cash in your business instead of chucking it into the tax void.
• Tronc & service charges → Get it right, and your staff take home more, while you pay less. Everyone wins.
• Retention & apprenticeships → Stop haemorrhaging money on recruitment when you could be building up the squad you’ve got.
• Bonuses over pay rises → Reward hard work without backing yourself into a financial corner.

The smartest operators are controlling their controllables—they’re finding the angles, making every pound count, and keeping their business in the game. Because in the end, it’s not about just scraping through. It’s about coming out the other side swinging.