Veterinary Practice Payroll & Auto-Enrolment

Your largest cost, running on a rota, changing every April

Staff cost is the biggest single line in almost every veterinary practice, and it is the one least likely to be modelled before it changes. A practice runs qualified veterinary surgeons, registered veterinary nurses, student nurses, animal care assistants, reception and administrative staff, and usually some combination of weekend rota, on-call and out-of-hours cover — each with its own hourly rate, enhancement and pension position.

On 1 April 2026 the statutory floor moved again. Employer National Insurance sits at 15% on almost the whole of every salary. And the Employment Rights Act 2025 has a live implementation calendar that runs from December 2025 well into 2027, with several dates in the next few months that change what a practice has to be able to demonstrate. This page sets out the rates, then the dates.

The 2026/27 numbers

Every rate and threshold that touches your payroll

Item	2026/27
Employer (secondary) Class 1 rate	15%
Secondary Threshold	£5,000 a year
Class 1A on benefits, Class 1B on PSAs	15%
Employee Primary Threshold	£12,570
Employee rate	8% to the Upper Earnings Limit, 2% above
Lower Earnings Limit	£6,708
Upper Earnings Limit	£50,270
Employment Allowance	£10,500
National Living Wage, 21 and over, from 1 April 2026	£12.71
18 to 20 rate	£10.85
Under 18 and apprentice rate	£8.00
Auto-enrolment earnings trigger	£10,000
Qualifying earnings, lower level	£6,240
Student loan Plan 2 threshold	£29,385
Student loan Plan 5 threshold	£25,000

What the £5,000 secondary threshold actually does

Illustrative only. A part-time registered veterinary nurse on £22,000 generates employer National Insurance of (£22,000 − £5,000) × 15% = £2,550. A full-time vet on £48,000 generates (£48,000 − £5,000) × 15% = £6,450. On a clinical team of ten averaging £32,000, the employer National Insurance bill is (£32,000 − £5,000) × 15% × 10 = £40,500 before a penny of pension contribution. The Employment Allowance takes £10,500 off that, leaving £30,000 — which is why the allowance is worth confirming rather than assuming, and why a group of practices under common control needs to know it is claimed once across connected employers, not once each.

Worth checking

The single-director exclusion. If a company has only one director, that director must not be the only employee liable for secondary Class 1 National Insurance for the Employment Allowance to be available. A one-person locum company is therefore normally excluded, and so are workers caught by the off-payroll working rules. A practice with nursing and reception staff on its payroll is not affected — but a separate service or property company that pays only a director is.

And what the wage floor does above itself

The National Living Wage rise to £12.71 is not only a cost on the staff who are on it. Once the floor moves, the gap between an animal care assistant at the statutory minimum and a qualified registered veterinary nurse compresses, and pay reviews follow up the structure. Add 15% employer National Insurance and pension contributions on top and an hourly increase costs meaningfully more than the increase itself. Illustrative: a 60p an hour rise for someone working 30 hours a week is £936 a year of gross pay, plus £140 of employer National Insurance at 15%, plus employer pension on the qualifying band — so around £1,100 before any differential adjustment further up the team.

Employment Rights Act 2025

What is already in force, and what is coming

The Act received Royal Assent in December 2025 and is being implemented in tranches. These dates come from the government's own implementation timeline, which was last updated on 16 July 2026 — and they differ from a good deal of earlier commentary, so it is worth reading them from the primary source rather than from memory.

Already in force

December 2025 — repeal of the Strikes (Minimum Service Levels) Act 2023.
18 February 2026 — repeal of most Trade Union Act 2016 provisions; simplified industrial action and ballot notices; dismissal protections for industrial action; the eligibility notice for day-one paternity and unpaid parental leave.
1 April 2026 — repeal of the Certification Officer levy.
6 April 2026 — day-one paternity leave and unpaid parental leave; Statutory Sick Pay with the Lower Earnings Limit and the waiting period removed; the maximum period for a collective redundancy protective award doubled; enhanced whistleblower protection on sexual harassment; bereaved partners' paternity leave with 52 weeks available; voluntary gender equality and menopause action plans; simplified trade union recognition.
7 April 2026 — the Fair Work Agency established.

The Statutory Sick Pay change is the one with an immediate operational consequence for a practice. Removing the Lower Earnings Limit and the waiting period means SSP is now payable to lower-paid part-time staff from the first day of sickness. On a rota-based clinical team with weekend cover, that changes both the cost and the absence policy.

Coming

By 31 August 2026 — electronic and workplace balloting for statutory union ballots.
1 October 2026 — the Employment Tribunal claim time limit extends from three months to six. In Scotland, 9 November 2026 for breach of contract claims. Practically, that doubles the window in which a departing employee can bring a claim, so contemporaneous records matter for twice as long.
30 October 2026 — a duty to take all reasonable steps to prevent sexual harassment, and liability for third-party harassment of employees. Also: a duty to inform workers of union membership rights, strengthened union access rights, recognition and derecognition reforms, and protections for union representatives.
December 2026 — Seafarer Protection Regulations.
End of 2026 — strengthened tipping law.
January 2027 — the unfair dismissal qualifying period cut to six months, uncapped compensatory awards, and fire-and-rehire protections.
2027 — mandatory gender equality and menopause action plans; enhanced dismissal protection for pregnant women and new mothers; guaranteed hours rights and notice-payment protections for zero-hours working; flexible working rights; bereavement leave including pregnancy loss; umbrella company regulation; restrictions on non-disclosure agreements in harassment and discrimination cases; changes to the collective redundancy consultation threshold.

Get this date right

Be precise about unfair dismissal. A great deal of commentary said day-one unfair dismissal rights from 2026. The government's implementation timeline gives January 2027 and a six-month qualifying period. That is a materially different proposition, and a practice that has been told to expect day one from 2026 has been given the wrong date — which matters if it has changed how it recruits or how it handles probation.

Third-party harassment, in a practice setting

The 30 October 2026 duty deserves a paragraph of its own because a veterinary practice is unusually exposed to it. The employer becomes liable for third-party harassment of employees, and the third party in a practice is usually a client — often a client having the worst day of their year. Reception and nursing staff absorb that. Meeting the duty means a written policy, a reporting route staff will actually use, recorded training, and a documented position on refusing service. Reasonable steps have to be demonstrable, not intended.

What you get

Payroll run properly, and the employment calendar kept in front of you

The payroll itself

Weekly, fortnightly or monthly, with rota-based hours, weekend and out-of-hours enhancements, overtime and student loan deductions handled as part of the run rather than as an exception.

Auto-enrolment

Assessment every pay period against the £10,000 trigger, contributions on the qualifying band, postponement notices done properly, and re-enrolment diarised.

Employment Allowance confirmed

Checked rather than assumed — including the single-director exclusion and the fact that connected employers claim it once between them.

Staff cost as a ratio

Total employment cost as a percentage of fee income, reported every period, so a wage settlement or an extra nurse shows up as a trend before it shows up at your year end.

Check your ratio

Benefits and P11D

Cars, accommodation, professional subscriptions and CPD paid on behalf of clinicians, with Class 1A at 15% and the reporting done on time.

The dates that are coming

The Employment Rights Act tranches, the April uprating, and every payroll and pension deadline on one calendar with your tax dates.

The payroll guide

Where this connects

Payroll is the number the rest of the practice depends on

Staff cost drives your EBIT margin more than any other line, which is why it belongs in the same conversation as accounts and management figures rather than in a separate bureau. If you are weighing up whether your margin has room for a pay settlement, the profitability calculator puts your staff cost ratio and EBIT margin side by side. And what a registered veterinary nurse can claim personally against their own income tax is covered on nurses and practice teams.

One note on scope: employment law is law, and we are accountants. We will tell you what a date does to your payroll and your cost base, and where a decision needs an employment lawyer we will say so rather than have a view.

Payroll questions

Common questions about veterinary practice payroll

What does a veterinary practice pay in employer National Insurance in 2026/27?

Employer secondary Class 1 National Insurance is charged at 15% on earnings above a secondary threshold of £5,000 a year. Class 1A on benefits in kind and Class 1B on PAYE Settlement Agreements are also 15%. The Employment Allowance is £10,500, and the £100,000 liability cap that used to restrict it was removed from April 2025, so employers of any size can now claim. The low secondary threshold is what makes the cost noticeable in a clinical business: a practice pays employer National Insurance on almost the whole of every salary, including part-time nursing and reception hours that used to fall largely below the old threshold.

Can a practice company with one director claim the Employment Allowance?

Usually not. The rule is that if your company has only one director, that director must not be the only employee liable for secondary Class 1 National Insurance. A single-director company with no other paid staff is therefore excluded, which catches a locum personal service company almost every time. Workers inside the off-payroll working rules are also excluded. A practice with nurses, receptionists and support staff on the payroll will normally qualify, but the allowance is claimed once across connected employers, so a group of practices under common control cannot claim it several times over.

What are the National Living Wage rates from 1 April 2026?

£12.71 an hour for workers aged 21 and over, £10.85 for 18 to 20 year olds, and £8.00 for those under 18 and for apprentices. In a veterinary practice those rates bite hardest on animal care assistants, kennel and ward staff, trainee nurses and weekend reception cover, and the knock-on effect is usually larger than the rise itself: once the statutory floor moves, the differential to a qualified registered veterinary nurse compresses, and pay reviews further up the structure follow. The employer National Insurance at 15% and pension contributions on top mean the true cost of an hourly increase is materially more than the increase.

When do the Employment Rights Act 2025 unfair dismissal changes take effect?

January 2027, with a six-month qualifying period — not day one, and not during 2026. This matters because a lot of earlier commentary said day-one unfair dismissal rights from 2026, and the government's own implementation timeline now gives January 2027 and a six-month qualifying period, alongside uncapped compensatory awards and fire-and-rehire protections. Two things do land sooner and are easy to miss: the Employment Tribunal claim time limit extends from three months to six on 1 October 2026, and the duty to take all reasonable steps to prevent sexual harassment, together with liability for third-party harassment, arrives on 30 October 2026.

Why does third-party harassment liability matter to a veterinary practice?

Because a practice is a client-facing business whose clients are frequently distressed. From 30 October 2026 employers become liable for third-party harassment of employees, alongside a duty to take all reasonable steps to prevent sexual harassment. In a veterinary setting the third party is usually a client at the reception desk or on the telephone, often at the worst moment of their week. What that means practically is a written policy, a reporting route a nurse or receptionist will actually use, recorded training, and a documented willingness to refuse service. The reasonable steps have to be demonstrable rather than intended.

What are the auto-enrolment thresholds for 2026/27?

The earnings trigger for automatic enrolment is £10,000 a year and the lower level of qualifying earnings is £6,240, with the upper level at £50,270. Contributions are calculated on the band between the lower and upper levels rather than on the whole salary. In a practice with part-time nursing and reception staff the trigger is the number to watch, because a rota change or a run of extra weekend shifts can take someone over £10,000 and create an enrolment duty mid-year. Postponement is available but has to be notified properly, and getting the notice wrong is one of the more common findings in a payroll review.

Payroll for a veterinary practice