How The National Insurance Increase Will Impact Your Business

Selecting Business Insurance

National Insurance is the tax from earnings from our jobs. National Insurance contributions are paid into a pot which is where many state benefits are funded from. This includes benefits such as:

  • State pension
  • Statuary sick leave
  • Maternity leave
  • Unemployment benefits

National Insurance is paid by employers and employees as well as self employed workers. The need to pay contributions to National Insurance stops once you reach state pension age.

National Insurance increase from April 2022

As we introduce the new financial year, the UK is also welcoming in an increase to National Insurance. From April 6th 2022 to 5th April 2023, National Insurance contributions will be increased by 1.25 percentage points. This increase is hoped to help pay towards the NHS and Health and Social Care in the UK.

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)

This increase does not apply to anyone over the State Pension age.

If you are employed you can expect to pay Class 1 National Insurance contributions. This is the rate for most people.

Your pay Class 1 National Insurance rate

  • £190 to £967 a week (£823 to £4,189 a month) 13.25%
  • Over £967 a week (£4,189 a month) 3.25%

You will pay less however if you are a married woman or widow with valid certification of election, or you are deferring your payments because you have more than one job.

Your National Insurance is paid with your tax, and will be taken from your wages before you get paid, all of this will be shown on your payslips from your employer or recruitment agency.

If you have any questions about your payslips, national insurance contributions or how you are affected by this increase, feel free to get in touch, or contact your employer.

Read also: 7 Things to Look for When Searching for an Insurance Company

How The National Insurance Increase Will Impact Your Business
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