With National Insurance Set to Rise in 2025, Here’s Why Outsourcing IT is the Smarter Choice for Small Businesses

With National Insurance Set to Rise in 2025, Here’s Why Outsourcing IT is the Smarter Choice for Small Businesses

As a small business owner, keeping expenses under control without compromising on quality is always a priority. Hiring an in-house IT team might seem like the best way to keep systems running smoothly. However, with upcoming changes to National Insurance (NI) and tax rates, the cost of maintaining an IT team is set to rise significantly, making outsourcing IT a more affordable and practical choice.

What’s Changing for Employers in 2025?

From April, National Insurance rates for employers will increase from 13.8% to 15%, while the threshold at which employers start paying NI on each employee’s salary will drop from £9,100 per year to £5,000. These changes mean higher costs on every employee’s salary, which could impact smaller businesses operating with tighter budgets.

For example, let’s look at the cost of hiring an in-house IT manager on a £35,000 salary. In addition to that base salary, employers must cover National Insurance, as well as costs for holiday pay, sick pay, training, and other resources. Here’s how the costs break down:

Cost Breakdown for an In-House IT Manager

Item Cost

‍Base Salary £35,000

‍National Insurance (15%) £5,250

‍Pension Contributions £1,050 (estimated at 3%)

‍Holiday Pay £2,692 (10% for 28 days leave)

‍Sick Pay (3 days/year) £450

‍Training & Development £800

‍Other Overheads £500 (equipment, utilities)

‍Total Estimated Cost £45,742

This total cost of £45,742 can place a considerable financial burden on small businesses. Additionally, if the IT manager takes time off or leaves the role, your business could face costly disruptions that impact productivity.

Key Benefits of Outsourcing IT

By outsourcing IT to a managed services provider (MSP), small businesses can access the expertise they need at a fraction of the cost, without the additional burden of payroll taxes, benefits, and management demands. Here’s why outsourcing IT is a valuable solution in 2025:

1. Cost Savings: Outsourcing IT removes the need for an in-house hire, saving you money on payroll taxes, benefits, and onboarding costs. Instead, you pay a predictable monthly fee and gain access to an entire team of specialists.
2. Flexibility and Scalability: As your business grows or takes on more tech-driven projects, your IT needs may change. Outsourcing provides the flexibility to scale services up or down as needed, so you only pay for what you use.
3. Consistent Support: Unlike in-house staff, who may take time off, MSPs offer reliable, round-the-clock support, so your business doesn’t experience downtime due to staff absences.
4. Enhanced Security and Compliance: Keeping up with cybersecurity threats and regulatory requirements can be overwhelming for small businesses. An MSP can implement robust security measures, monitor for threats, and ensure compliance, all without the need for additional staff.
5. Access to Expertise: MSPs employ specialists across various IT fields, meaning you gain access to a wide range of expertise that would be difficult to recruit and maintain in-house. This access ensures your business benefits from the latest technology and best practices.

Real Cost Comparison: In-House IT vs. Outsourced IT

If we compare our in-house example with a total cost of £45,742, outsourcing to a reputable IT provider like Clyk could reduce that expense by up to 50%. Additionally, businesses that outsource IT benefit from predictable, budget-friendly monthly fees that cover support, cybersecurity, and system monitoring—all of which would cost significantly more if managed in-house.

Final Thoughts

As National Insurance rates rise in 2025, outsourcing IT makes even more financial sense for small businesses. It provides consistent, expert-level IT support without the unpredictable costs and administrative demands of in-house staff. If you’re looking for an affordable, seamless IT solution that delivers peace of mind, outsourcing could be the answer.

Curious about how outsourcing could work for your business? Reach out to us at Clyk for a free consultation, and discover how we can help you achieve your IT goals affordably and efficiently.