During the Spring Statement, the Chancellor Rishi Sunak announced that the National Insurance thresholds would increase in July.
Now July is here, what does this mean?
From 6 July most employees will benefit. If you are paid monthly, you will be able to earn £1047.50 before Class 1 NI is charged, compared to £823.33 in June. This will result in up to £30 extra in your net pay, as you are making a saving at 13.25% on the difference. Similarly, if you are paid weekly the threshold is up to £242 from £190 a week, which means you will receive up to £6.89 more in your net pay.
Will you be paying more national insurance than you did last year?
This year national insurance has been increased by 1.25%, to include a health and social care levy, so despite the increase to thresholds, you may still be paying more NI that you did last year.
For Employees, the turning point is around £40,000, above this level you are paying more national insurance than you were this time last year.
Who has to pay for NI?
- Employees on their weekly or monthly wages
- Employers have to pay for their staff’s NI contributions
- Self-Employed / Sole Traders on their profits
For more guidance about how the change will affect you or your earnings, get in touch with your local AIMS Accountant.