From April 2022, the rates of National Insurance Contributions (NICs) are set to increase by 1.25 percentage points. The increase in NICs was legislated as a means to increase funds directed to the National Health Services (NHS).
Who Pays NICs and Who Will be Affected?
NICs are paid by employees, the self-employed, and employers on behalf of their employees. The increase in NICs will apply to employees and self-employed individuals who earn above the current primary threshold limit of £9,568. Those who earn below £9,568 amount are not required to pay NICs. However, as of April 2022, the current primary threshold limit will increase to £9,880.
How Much NICs Will I Be Paying?
Currently, employees who earn above £9,568 pay the main rate of 12%, increasing to 13.25% from April 2022. Employers who pay on behalf of their employees who earn above the current NICs threshold of £8,840, currently pay 13.8%, rising to 15.05% from April 2022. Finally, self-employed people who earn above £9,568 currently pay the main rate of 9%, rising to 10.25% from April 2022.
Employees and self-employed individuals who earn above the higher-rate threshold of £50,270, pay a rate of 2%, increasing to 3.25% from April 2022. Employers who pay on behalf of their employees who earn above the higher rate threshold pay 13.8%, rising to 15.05% in April 2022.
See here for a breakdown of NIC rates by Gov.UK.
