National Insurance changes – How much do we have to pay now?

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.