National Insurance Contributions – What’s happening?

The amount we pay in National Insurance Contributions (NIC) increased on 6 April 2022  by 1.25%, from 12% to 13.25%.

This may result in a reduction in take-home pay. However, the good news is that the increase in National Insurance will only last until June for most employees. This is because the UK government is going to raise the National Insurance threshold in July 2022.

Below is a table of examples showing how monthly NIC will be affected in April 2022 and July 2022:

Annual Salary

NIC in 2021/22 Tax Year

April 2022 NIC

July 2022 NIC

£20,000

£104

£112

£82

£30,000

£204

£222

£192

£40,000

£304

£333

£303

£50,000

£404

£443

£413

£60,000

£423

£472

£440

£70,000

£439

£499

£467

£80,000

£456

£526

£495

£90,000

£473

£554

£523

£100,000

£489

£581

£551

 Earnings of more than £4,189 per month or over £50,270 per year will see an increase in NIC from 2% to 3.35%.

The government sets the NIC rate each Tax Year for all employees. However, it is important to check your tax status with HMRC to ensure you are paying the correct PAYE. For example, if your benefits have changed or increased contributions to a personal pension, you should contact HMRC to ensure your Tax Code reflects any change in circumstances. In addition, you will need your National Insurance Number, which can normally be found on your payslip.

You can also check your individual NIC by using the government calculator: http://nicecalculator.hmrc.gov.uk/Class1NICs1.aspx

For further assistance, please get in touch with a member of the IHRS team. Email HRhelp@ihrsolutions.co.uk, call 01604 709509 or visit our website.  

About the author

Laura is a HR professional with 20 years’ experience with Financial Services, the majority of which has been within insurance. In her role with UKGI Group, Laura provides objective support to firms on employment law and HR issues. She uses her interpersonal skills and knowledge to work with firms to help them develop strong and resilient HR strategies and establish healthy organisational cultures. Laura’s clients receive personalised support with a real can-do approach.

Laura is an Associate of the Chartered Institute of Personnel and Development (CIPD). She holds a Diploma Professional Development Scheme.

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