New national insurance rates – this is how much you’ll pay each month starting next April

Boris Johnson has secured his controversial £ 12 billion tax hike which will be spent on the NHS as he recovers from the Covid-19 pandemic as well as to cover the costs of adult social care in England.

On Wednesday, the Commons voted by 319 to 248 in favor of the 1.25 percentage point increase, raising National Insurance Contributions (NICs) from 12% to 13.5% from April 2022.

However, high-income Scots in the top tax bracket contribute more to NICs than those in other parts of the UK. Under the separate Scottish tax brackets, those earning over £ 43,663 already pay more income tax at a rate of 41% than high income earners in England, who fall into a tax bracket of 40% on income over £ 50,270 per year.

In addition to paying more tax under the different rate, Scottish high earners also continue to pay 12p per pound NICs on their highest earners up to the £ 50,270 mark, where NICs drop back to 2 p per pound.

Here’s everything you need to know about network card changes and how they affect your monthly pay.

What is national insurance?

National insurance is an income tax paid by employees, employers and the self-employed who pay it out of their profits.

National insurance is used to pay for the NHS, state benefits, and state pensions.

What are the changes in national insurance contributions?

Employees, employers and the self-employed will all pay 1.25 pence more in sterling for national insurance contributions from April 2022.

Who pays the national insurance?

  • Employees pay NI on their salary
  • Employers also pay additional NICs for staff
  • Self-employed people pay NI on their profits

From April 2023, national insurance will revert to its current rate and the additional tax will be collected in the form of a new levy for health and social care.

This levy will also be paid by people over the state retirement age who continue to work.

How much will the new plans pay?

The amount of NICs you pay depends on your salary, but people earning less than £ 9,564 do not have to pay National Insurance and will not have to pay the new levy.

Salary and new national insurance contribution

  • £ 20,000 – pay an additional £ 130 per year (£ 10.80 per month)
  • £ 30,000 – pay an additional £ 255 per year (£ 21.25 per month)
  • £ 50,000 – pay an additional £ 505 per year (£ 45.80 per month)
  • £ 80,000 – pay an additional £ 880 per year (£ 73.33 per month)
  • £ 100,000 – pay an additional £ 1,130 per year (£ 94.16 per month)

You can read more about the changes to the NICs in the new Build Better: Our Plan for Health and Human Services document on the GOV.UK website here.

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