The UK government has announced that there will be an increase in National Insurance Thresholds for the 2022-2023 tax year. This means employees and those who are self-employed will pay National Insurance Contributions (NICs) on less of their income or profits. This will come into effect from 6th July 2022. This is especially important for the payroll of your business as these changes must be reflected in your payroll.
The increase in the National Insurance Threshold is being introduced to try and lessen the impact of the previous National Insurance Contributions change. The rate of National Insurance Contribution which people are required to pay was increased for one year from April 2022. The total which everyone must contribute has risen by 1.25%. This rise in contributions are to go towards the NHS, health, and social care.
Who is affected by these changes?
It will affect anyone who is over 16 years old, is employed and earns more than £190 a week or anyone who is self-employed and makes a profit of at least £6,725 each year.
What will the new National Insurance Thresholds be?
The tables below detail the changes in the National Insurance Thresholds.
National Insurance Thresholds - Class 1
Employees and employers pay Class 1 National Insurance subject to the amount the employee earns.
Class 1 - Weekly
Class 1 - Monthly
National Insurance Thresholds - Class 2 and 4 (self-employed)
There are two types of National Insurance for those who work for themselves, subject to their profits.
For more information on the National Insurance Thresholds click here.
How do you Pay your National Insurance Contributions (NICs)?
Your employer will take off your National Insurance Contributions from your wages prior to you getting paid if you are employed and your payslip will reflect this.
If you are self-employed, you have to pay Class 2 and 4 National Insurance subject to the amount of profit you make. People usually pay for this through self-assessment.
Traynor Accounting can help you with your NICs
It can be hard to stay well informed on all of the latest payroll updates and changes to compliance. Traynor Accounting can take away that worry from you as we are always well informed on new changes affecting payroll and can help you understand these.
Your payroll must incorporate these National Insurance Threshold changes. Traynor Accounting offer a full payroll service for small and medium sized businesses throughout the UK and we can ensure you understand all of these new changes.
To find out more about our payroll service give us a call today on 01236 222668 for your free accountant consultation (no obligation!).