National insurance tax calculator – how much more will you pay for social care

The move breaks a key Conservative manifesto pledge not to increase income taxes, NI, or VAT and comes with a five-year freeze on NI thresholds, as well as the personal allowance for tax relief. The income tax, announced in the March budget – a ‘stealth tax’ that will bring the state nearly £ 20 billion in additional revenue by 2026.

From April 2022, employees, freelancers and businesses will pay more and the highest earners will pay the most, with an annual income of £ 150,000 paying an additional £ 1,755 per year, according to the firm’s calculations. Blick Rothenberg tax.

It does not affect people claiming state pension. However, from April 2023, retirees will pay 1.25% national insurance contributions on income earned while working.

However, NI is not payable on investment income, which means wealthy owners or those who live on dividends from investment portfolios are exempt.

Someone with £ 100,000 will pay £ 1,130 more, while an employee of £ 80,000 will pay an additional £ 880 per year. Those with salaries of £ 60,000, £ 40,000 and £ 20,000 will be required to remit an additional £ 630, £ 380 and £ 130 respectively per year.

The “class one” contribution rates that employees pay on income over £ 9,568 per year will drop from 12.25% to 13.25%. pc, from 2 pc.

The self-employed pay slightly lower “class four” contribution rates. The rate they pay will rise to 10.25%, from 9% on annual income over £ 9,568 and 3.25% on anything over £ 50,270, from 2%.

Some low-income freelancers pay annual NI “class two” earnings of £ 6,515 up to the class four cut-off, at a rate of £ 3.05 per week.

The rate of employer contributions paid by companies will rise to 15.05pc, against 13.8pc.

The increase in the levy will not apply to “class two” contributions for low-income freelancers or to voluntary “class three” contributions.

Employees and employers can reduce the amount of NI they pay through wage sacrifice programs, where workers pay for benefits such as loans for season tickets or bikes to the office, or by increasing the amount they pay for occupational pensions. diets.

Wage sacrifice schemes also exist for car rental agreements, private health care, and dental insurance, although these benefits are generally classified as taxable benefits and subject to income taxes.