The government temporarily increased the NIC Primary Threshold and Lower Profits Limit for the 2022/2023 tax year from 6th July 2022. This means you will likely experience a change in your take-home pay on and after this date – depending on how much you earn.
Your National Insurance Contribution (NIC) rates will depend on your employment status:
If you are employed, you will not pay any NIC if you earn less than £12,570.
The NIC rates on income of £12,570 to £50,270 a year (£1,048 to £4,189 a month) have already increase by 1.25% from 12% to 13.25% from 6th April 2022.
Any income above £50,270 a year (over £4,189 a month) will attract a 3.25% rate from the previous 2%.
If you are self-employed, your annual profits between £9,881 and £50,270 will attract a 10.25% NIC rate. Your profits that are above £50,270 are taxed at a National Insurance rate of 3.25%.
This will be in addition to the £3.15 you pay if your self-employed profits are £6,725 or more.
As an employer, from April 2022 you will pay the National Insurance contributions rate of 15.05% for every employee earning income above the secondary threshold – £9,100 to £50,270 a year (£758 to £4,189 a month). This is a 1.25% increase from the initial 13.8% national insurance payments for earnings over £8,840 a year.
There are no specific changes for the employer from July 2022, as the secondary threshold for national insurance remains unchanged.
You will not pay the additional 1.25% levy for:
You may experience a fall in your national insurance bill in July compared to April and pay less national insurance in July 2022 than you did in the 2021/22 tax year. However, if you earn more than £50,000 a year it is likely that you will still pay more national insurance in July 2022 than you were paying in the 2021/22 tax year.
You can use the HMRC calculator to estimate how the new rates will affect you and also understand your National Insurance position now compared to this time last year.
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