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

However, the move will break a key Conservative manifesto pledge not to raise income tax, NI or VAT and comes with a five-year freeze on NI thresholds, as well as the personal allowance for income tax, announced in last March’s budget – a ‘stealth tax’ which will bring the state almost £20billion in additional revenue by 2026.

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

This does not affect state pension claimants. However, from April 2023 pensioners will pay 1.25% national insurance contributions on earnings from work.

However, NI is not payable on investment income, meaning wealthy homeowners or those living on dividends from investment portfolios are exempt.

How much more tax will I pay?

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

The rates of ‘class 1’ contributions that employees pay on earnings over £9,568 a year will rise from 12% to 13.25%, while the ‘top rate of pay’ which comes into effect on earnings of over £50,270 a year will increase to 3.25pc, from 2pc.

The self-employed pay slightly lower “class 4” contribution rates. The rate they pay will rise to 10.25%, up from 9% on annual earnings over £9,568 and to 3.25% on anything over £50,270, up from 2% previously.

Some low-income freelancers pay NI ‘class 2’ annual earnings of £6,515 up to the class four threshold, at a rate of £3.05 per week.

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

The increased levy will not apply to “class 2” contributions for low-income self-employed or voluntary “class 3” 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 get to the office, or by increasing the amount they pay into workplace retirement. diets.

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

This article has been updated with the latest information.

Esther L. Steinbach