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Class 1 National Insurance Contributions (NICs) 2022 to 2023

As we approach the new tax year did you know that National insurance for employees, employers and the self-employed will be increasing? National insurance contributions are set to increase from April 2022 by 1.25% to include the health and social care Levy. Initially this increase will be to help ease pressures on the NHS.

The HMRC have asked all employers to communicate the increase to their employees with the following message to be added to payslips: “1.25% uplift in NICs funds NHS, health & social care”. If we process your payroll, we can add this message to any hard copy or electronic payslips we produce for you.

How much more will our employee be paying?

  • If an employee earns £20,000 they will pay an additional £89 NI per year
  • If an employee earns £30,000 they will pay an additional £214 NI per year
  • If an employee earns £50,000 they will pay an additional £464 NI per year
  • If an employee earns £80,000 they will pay an additional £839 NI per year
  • If an employee earns £100,000 they will pay an additional £1089 NI per year

The new rates and thresholds can be found below:

Class 1 National Insurance thresholds

Deductions can only be made on earnings above the lower earnings limit:

Class 1 National Insurance thresholds2022 to 2023
Lower earnings limit£123 per week
£533 per month
£6,396 per year
Primary threshold£190 per week
£823 per month
£9,880 per year
Secondary threshold£175 per week
£758 per month
£9,100 per year
Freeport upper secondary threshold£481 per week
£2,083 per month
£25,000 per year
Upper secondary threshold (under 21)£967 per week
£4,189 per month
£50,270 per year
Apprentice upper secondary threshold (apprentice under 25)£967 per week
£4,189 per month
£50,270 per year
Veterans upper secondary threshold£967 per week
£4,189 per month
£50,270 per year
Upper earnings limit£967 per week
£4,189 per month
£50,270 per year

Class 1 National Insurance rates

Employee contribution rates

National Insurance category letterEarnings at or above lower earnings limit up to and including primary thresholdEarnings above the primary threshold up to and including upper earnings limitBalance of earnings above upper earnings limit
A0%13.25% 3.25%
B 0% 7.10% 3.25%
Cnilnilnil
F (Freeport) 0% 13.25% 3.25%
H (apprentice under 25) 0% 13.25% 3.25%
I (Freeport – married women and widows reduced rate) 0% 7.10% 3.25%
J 0% 3.25% 3.25%
L (Freeport – deferment) 0% 3.25% 3.25%
M (under 21) 0% 13.25% 3.25%
S (Freeport – state pensioner)nilnil nil
V (veteran) 0% 13.25% 3.25%
Z (under 21 – deferment) 0% 3.25% 3.25%

Employer contribution rates

National Insurance category letterEarnings at or above lower earnings limit up to and including secondary thresholdEarnings above secondary threshold up to and including Freeport upper secondary thresholdEarnings above Freeport upper secondary threshold up to and including upper earnings limit, upper secondary thresholds for under 21s, apprentices and veteransBalance of earnings above upper earnings limit, upper secondary thresholds for under 21s, apprentices and veterans
A0%15% 15% 15%
B 0% 15% 15% 15%
C 0% 15% 15% 15%
F (Freeport) 0% 0% 15% 15%
H (apprentice under 25) 0% 0% 0% 15%
I (Freeport – married women and widows reduced rate) 0% 0% 15% 15%
J 0% 15% 15% 15%
L (Freeport – deferment) 0% 0% 15% 15%
M (under 21) 0% 0% 0% 15%
S (Freeport – state pensioner) 0% 0% 15% 15%
V (veteran) 0% 0% 0% 15%
Z (under 21 – deferment) 0% 0% 0% 15%

for more information on our payroll outsourcing process please contact Sara Every below:

Sara Every

Assistant Manager

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