From 6th April 2022 to 5th April 2023 National Insurance contributions will increase by 1.25%. The UK government has confirmed that the money raised from the increase will be spent on the NHS, health, and social care.
The increase will apply to:
National Insurance (NI) was introduced in 1911 and significantly expanded by the Labour government in 1948. It acts as a form of social security, for example, paying NI throughout your working life entitles you to the government pension upon retirement.
Statutory sick pay, maternity leave, and certain unemployment benefits are funded by NI contributions. NI contributions are paid by employees, the self-employed, and employers on behalf of their employees.
Employees who earn above £9,568 currently pay the main rate of 12%. This will increase to 13.25% from 6 April 2022. Employers who pay on behalf of their employees who earn above the current NI contribution threshold of £8,840, presently pay 13.8%, rising to 15.05% from 6 April 2022. Those who are self-employed and who earn above £9,568 currently pay the main rate of 9%. On 6 April 2022, this will increase to 10.25%.
Employees and self-employed individuals who earn above the higher-rate threshold of £50,270, currently pay a rate of 2%. This will increase to 3.25% from 6 April 2022. Employers who pay on behalf of their employees who earn above the higher rate threshold pay 13.8%, rising to 15.05% on the aforementioned date.
Calculating the increase in NI contributions can be confusing for small businesses that do not have a dedicated accounting department. Our team can assist you with any questions you have. Just click 'Get started' below for a free 15 minute consultation with one of our expert lawyers.
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