NI Threshold Increase from 6th July 2022

NI Threshold Increase from 6^th July 2022

In the Spring Statement the chancellor Rishi Sunak announced an increase in the National Insurance threshold.

From 6 July 2022, the level at which workers start paying National Insurance will increase to £12,570 p/a or £1048 per month.

Previously the rate for 2022/23 was set at £9880 per year or £823 per month. The change aligns the starting point for National Insurance with the standard tax personal allowance for this tax year.

Whilst the employees National Insurance contributions for April to June 2022 will not have been affected by the increase in allowance, from July 6^th, 2022, the change means that £2700 (£225 per month) less of workers’ income will be subject to National Insurance.

The increase in the thresholds could save the employee up to £29.81 per month.

The changes to the National Insurance will automatically be applied to your payroll calculations, and employees will notice the change on their July payslips if applicable.

However, if your employees would like to find out how these changes may affect them before their July payslip, HMRC has released a tool linked below that will help them calculate the estimated changes:

https://www.gov.uk/guidance/estimate-how-the-national-insurance-contributions-changes-will-affect-you?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=63a36c1c-6fe0-4e8a-b42c-94519fbc27cc&utm_content=daily