• Employment
  • April 06, 2022

Understanding the increase in National Insurance contributions

article

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:

  • Class 1 (paid by employees)
  • Class 4 (paid by self-employed)
  • secondary Class 1, 1A and 1B (paid by employers)

What is National Insurance?

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. 

 

Employment Legal Advice

 

What are the figures behind the NI contributions increase?

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.

Get legal assistance from LawBite

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.

 

Get started

 

Additional resources

In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.



Related Articles

Read more of our latest blog posts, featuring all the latest legal news, analysis and opinion from our expert lawyers.

blog image
  • By LawBite Team
  • May 13, 2022
The benefits of hybrid working

During the height of the Covid-19 pandemic, many office workers had to work solely from home, something which was mostly unheard of before the pand...


Employment
blog image
  • By LawBite Team
  • May 12, 2022
What is a Temporary Work Visa?

A Temporary Work Visa, formally known as a Tier 5 Visa allows foreign nationals to live, work, or study in the UK for a short time, between 6 and 2...


Employment
blog image
  • By LawBite Team
  • May 12, 2022
What are Right to Work documents?

As a business owner, you have a legal requirement to carry out a Right to Work check (RTW) on all new employees to verify that their immigration st...


Employment

LawBite can help you

LawBite is on a mission to provide business legal advice that is easier to access, clearer to understand and much cheaper. Our on-line legal advice platform can quickly connect you with expert business legal advice. Our friendly, highly qualified business lawyers, solicitors and mediators will give you the guidance and reassurance that comes from customised legal advice for small and medium sized business.

Whether you are bringing or defending a legal claim, outsourcing work, want a business contract review to ward off disagreements, talk to an expert trademark lawyer, resolve a contractual dispute with methods like mediation and arbitration, or getting your new company set up and on the right footing with a robust shareholder agreement and GDPR standards, we can help you succeed.

defend a claim

Talk to a Lawyer

Book a Call
defend a claim

Essentials Plan

Join for Free