THOUSANDS of workers will earn more money from July, will you be one of them?
A huge change in National Insurance will happen on July 6, which could mean an increase in your income.
Employees will not start paying National Insurance (NIC) contributions until they earn at least £12,570.
This means you can earn more without paying tax as the current threshold is £9,500.
The exact amount of contributions you pay depends on your income. The lower your salary, the lower the amount you pay.
Now you can see how much you’ll be able to save when the network adapter threshold increases – and it couldn’t be easier.
The government has created a practical tool online calculator do the sums for you.
To calculate how much you will save, simply go to the website and enter your annual salary to receive an estimate.
Some employees will pay nothing and no longer pay NICs at all.
Some could save hundreds of pounds while the highest earners will only save £10.
To help you calculate if you’ll have any changes to your network card payments, we’ve rounded up some estimates for you:
- £10,000. Current payment: £43.35. New estimate: €0. Savings: £43.35.
- £15,000. Current payment: £658.98. New estimate: £321.12. Savings: £337.86.
- £20,000. Current payment: £1,274.61. New estimate: £983.64. Savings: £290.97.
- £25,000. Current payment: £1,890.16. New estimate: £1,646.16. Savings: £244.
- £50,000. Current payment: £4,968.36. New estimate: £4,958.64: Savings: £10
You can use this tool if you receive the same salary each month and are paid through the PAYE system.
PAYE stands for Pay As You Earn. This system allows HMRC to track income tax and NICs.
However, the calculator can only provide a rough estimate. Your outcome may be affected by various working arrangements between July 6, 2021 and July 5, 2022.
These factors include whether you are self-employed, working outside the UK or over the statutory retirement age.
Additionally, your salary and NICs may be affected by commission or if you are paid weekly.
What is National Insurance?
National Insurance is a tax paid by employees aged 16 and over who receive a certain level of remuneration.
The tax helps finance benefits, including state pension, sick pay and unemployment benefit.
Every UK citizen automatically receives an NI number before they turn 16.
The number helps the government track your income and ensures that you pay the correct amount of tax.
Employees pay 13.25% on earnings between £9,564 and £50,268. If you earn more than £50,268 you will be taxed an additional 3.25%.
You can find out how much you have been taxed by checking your payslip each month.
If you are self-employed, national insurance works differently. If you are over the legal retirement age, you will not pay everything.
Am I able to receive more financial aid?
The government has announced a package of measures to help households during the cost of living crisis.
Chancellor Rishi Sunak announced earlier this year that Britons would get up to £400 off their energy bills as part of a £21billion cost of living bailout.
Additional payments of up to £650 will be made to the most vulnerable, retired or disabled. These payments are grants, not loans, and therefore do not need to be repaid.
The package was announced after it was revealed that household energy bills are set to rise by up to £2,800 in October.
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