fbpx
National insurance increase of 1.25% each month from April 2022

National insurance increase of 1.25% each month from April 2022

National Insurance is a tax on employees, employers, and self-employed earnings. The government takes the tax on earnings and applies them to the NHS, state benefits, and the state pension.

National insurance 1.25% increase report

Mr Boris Johnson has doubled down on his National Insurance (NI) tax hike plans to create funding for health programs. In a bold manoeuvre, he refused to compromise with some members of the Conservative Party against this. The party were concerned about the cost-of-living crisis.


The prime minister has been in hot water recently after facing pressure originally to scrap or at least delay the NI increase of 1.25 percentage points – a 10 percent increase on the main rate National Insurance contribution around the country in April.


Mr Johnson and Mr Sunak came together to stop the Covid backlogs, NHS backlog and reform social care. To make this happen, employees, employers, and the self-employed will have to pay 1.25% more for National Insurance Contributions.

Increase to National insurance Salary and the new national insurance rate

  • If you earn less than £9,564 – you will pay no national insurance, and new tax does not apply
  • If you earn £20,000 – you will pay an additional £130 a year (£10.80 per month)
  • If you earn £30,000 – you will pay an additional £255 a year (£21.25 per month)
  • If you earn £50,000 – you will pay an additional £505 a year (£45.80 per month)
  • If you earn £80,000 – you will pay an additional £880 a year (£73.33 per month)
  • If you earn £100,000 – you will pay an additional £1,130 a year (£94.16 per month)

Each of these increases in National Insurance equates to around a 10.4% increase, depending on which band you’re in. From April 2023, the National Insurance will return to its current rate, and the extra tax collected will be used to pay for the new Health and Social Care Levy. The government will also collect such levies from those who reach state pension age and wish to continue working.


Read more about the recent NIC changes in the new Build Back Better: Our Plan for Health and Social Care document on the GOV.UK.


Contact one of our accountants and book your free 30 minutes consultation.


Book a free consultation with an expert

Free Accounting Software

Related Article: HMRC inform families about £2,000 a year Tax-Free childcare payment

No Comments

Sorry, the comment form is closed at this time.