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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.