Increases to Employers’ National Insurance Contributions (NIC) and National Living Wage (NLW) outlined in the Autumn Budget could cost an average community pharmacy premises more than £12,000 each year - totalling around £125m across the sector as a whole.

The estimate is based on analysis by the Independent Pharmacies Association (IPA), which calculated the impact of last week's Budget on 2025/26 employer costs for an average pharmacy team.

Employer NIC - which will be 15% and apply after the first £5,000 of an employee's salary - will rise next year by by £1,105,80 for a pharmacist and £925.80 for an accuracy checking technician, based on average salaries, the IPA estimated.

Increased NIC would also add £841.80 to the cost of employing an NVQ2 level dispenser, while increases to the NLW would see their salary increased by £1,801.80.

The same cost would apply to other staff paid the NLW, such as a driver or a healthcare assistant.

And in order to keep pace with the NLW rise, an NVQ3 dispenser's salary would also increase by around £1,872 and employer NIC would increase by £877.80 each year, the IPA said.

Even adjusted for some staff working part-time, an average pharmacy team would cost an employer £12,002.88 more to employ in 2025/26 than in 2024/25, the IPA suggested.

IPA chief executive Dr Leyla Hannbeck described the scale of the rise in NIC as 'deeply worrying'.

'This combined with other cost increases such as the increase in the national minimum wage are a wrecking ball to the sector which is already struggling for survival,' she said.

And she called for community pharmacy employers to be exempted from employers' national insurance payments.

The IPA also said that the increase in Employment Allowance - where the government will now pay the first £10,500 of all employers' NICs - was 'not sufficient for the sector'.

'We hope that the current negotiations take this into account above any increase that are to be awarded, bearing in mind that the community pharmacy sector has not received an increase in core remuneration since 2015,' the IPA said in a statement shared with The Pharmacist on Friday (1 November).

Katie Collin, partner at healthcare accountants Ramsay Brown LLP,  told The Pharmacist today that she had 'no doubt' that the 'hike to employers' NI contributions' would 'have a knock-on effect for community pharmacies'.

'Pharmacies typically have a gross profit margin of around 20-30%, but, even without this NI spike, staffing costs have been eating into that money, bringing it down to around 5-10%,' she said.

'The chancellor's changes will only send these costs into overdrive, and, unless funded centrally, it could even tip a number of pharmacies into deficit — or, at least, take a material chunk off their earnings.

'Without swift action, these Budget revelations could be critical for community pharmacies, as well as the rest of the UK's medical sector,' she added.