The Chancellor has announced an Employment Allowance of £2,000 a year towards employer National Insurance contributions under moves to boost jobs.
George Osborne told MPs that the Government was taking tax off jobs, which would particularly help small businesses who wanted to hire their first employee or expand their workforce.
From April 2014, all businesses and charities will be eligible for the new allowance, which will reduce their National Insurance contributions (NICs) bill.
Up to 2.5 million employers will benefit, while 450,000 of the country's smallest businesses will no longer pay any employer NICs.
Employers with fewer than 10 members of staff will see their employer NICs bill cut by £805, said the Treasury.
Under the announcement, every business will be able to employ one worker on a salary of £22,400, or four employees on the minimum wage, without paying any employer NICs.