NATIONAL insurance rates will rise in April and mean millions of people will pay more taxes.
The hike was first announced last year and is designed to help meet social care costs.
But the increase comes at the same time as the cost of living is skyrocketing, including food and energy bills.
The tax hike will continue, however, Downing Street has confirmed, despite fears it will further squeeze already hardened households.
National insurance rates are different depending on your income.
You pay National Insurance when you are employed and earn more than £9,568 a year, or £184 a week.
Self-employed people earning over £6,515 also pay National Insurance contributions.
The hike will affect the finances of around 25 million Britons, who will have to pay an additional 1.25 percentage points.
This means rates will drop from 12% on earnings between £184 and £967 per week to 13.5%.
The rate on winnings above this amount will also increase from 2% to 3.25%.
As the rates are a percentage of your income, the exact amount you will pay more will depend on your situation.
Currently, someone earning £15,000 a year pays contributions of £652, while another person earning an annual salary of £25,000 is taxed £1,852 each year.
On earnings of £15,000, the increase will mean paying an additional £68 a year, and an additional £25,000 and £193.
You can use The Sun’s tax calculator, created with tax advisers Blick Rothenberg, to help you figure out how much tax you’ll pay and what your take-home pay will be.
You can find The Sun’s tax calculator here.
You will be asked to fill in some personal information such as your age and whether you are married or have children.
Fill in your annual salary and any other income you have, such as from a pension or investments, and you can begin to understand the difference you will pay in taxes this year and next.
Remember that the tax year is mid-year and the new one starts in April 2022.
The government had previously announced that there would be no increase in income tax next year and that current rates would be frozen until 2026.
It should be noted that the information entered in the Blick Rothenberg The Tax Calculator may be used to produce aggregate trend analysis, but will not be used to identify individuals or their personal circumstances.
The calculator is designed only to give you an indication of how the changes might affect your situation.
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