Tuesday, June 14, 2022

[New post] National Insurance threshold rise to boost take-home pay

National Insurance threshold rise to boost take-home pay

Opportunity

Jun 14

On 23 March 2022, the UK government announced at Spring Statement 2022 an increase in National Insurance thresholds for the 2022 to 2023 tax year. This means employees and self-employed people will pay National Insurance contributions on less of their income or profits. We will publish updated rates and thresholds before these changes take effect.

1. Class 1 National Insurance thresholds

Employers and employees pay Class 1 National Insurance depending on how much the employee earns. You can view these earnings thresholds by week (table 1.1) or by month (table 1.2).

1.1 Weekly thresholds

£ per week	6 July 2022 to 5 April 2023	6 April 2022 to 5 July 2022	2021 to 2022	2020 to 2021	2019 to 2020
Lower Earnings Limit (LEL) Employees do not pay National Insurance but get the benefits of paying	£123	£123	£120	£120	£118
Primary Threshold (PT) Employees start paying National Insurance	£242	£190	£184	£183	£166
Secondary Threshold (ST) Employers start paying National Insurance	£175	£175	£170	£169	£166
Upper Earnings Limit (UEL) All employees pay a lower rate of National Insurance above this point	£967	£967	£967	£962	£962
Upper Secondary Threshold (UST) Employers of employees who are under 21 pay zero rate up to this point	£967	£967	£967	£962	£962
Apprentice Upper Secondary Threshold (AUST) Employers of certain apprentices who are under 25 pay zero rate up to this point	£967	£967	£967	£962	£962
Freeports Upper Secondary Threshold (FUST) Employers of qualifying employees working in a freeport site pay zero rate up to this point	£481	£481	N/A	N/A	N/A
Veterans Upper Secondary Threshold (VUST) Employers of qualifying employees pay zero rate up to this point	£967	£967	£967	N/A	N/A

1.2 Monthly thresholds

£ per month	6 July 2022 to 5 April 2023	6 April 2022 to 5 July 2022	2021 to 2022	2020 to 2021	2019 to 2020
Lower Earnings Limit (LEL) Employees do not pay National Insurance but get the benefits of paying	£533	£533	£520	£520	£512
Primary Threshold (PT) Employees start paying National Insurance	£1,048	£823	£797	£792	£719
Secondary Threshold (ST) Employers start paying National Insurance	£758	£758	£737	£732	£719
Upper Earnings Limit (UEL) All employees pay a lower rate of National Insurance above this point	£4,189	£4,189	£4,189	£4,167	£4,167
Upper Secondary Threshold (UST) Employers of employees who are under 21 pay zero rate up to this point	£4,189	£4,189	£4,189	£4,167	£4,167
Apprentice Upper Secondary Threshold (AUST) Employers of certain apprentices who are under 25 pay zero rate up to this point	£4,189	£4,189	£4,189	£4,167	£4,167
Freeports Upper Secondary Threshold (FUST) Employers of qualifying employees working in a freeport site pay zero rate up to this point	£2,083	£2,083	N/A	N/A	N/A
Veterans Upper Secondary Threshold (VUST) Employers of qualifying employees pay zero rate up to this point	£4,189	£4,189	£4,189	N/A	N/A

2. Class 1 National Insurance rates

2.1 Employer rates

This table shows how much employers pay towards their employees' National Insurance.

	2022 to 2023	2021 to 2022	2020 to 2021	2019 to 2020
Rate above the Secondary Threshold	15.05%	13.8%	13.8%	13.8%
Rate below Upper Secondary Threshold	0%	0%	0%	0%
Rate below Apprentice Upper Secondary Threshold	0%	0%	0%	0%
Rebate for any employees in contracted-out pension schemes	N/A	N/A	N/A	N/A
Rebate for any employees in money-purchase schemes	N/A	N/A	N/A	N/A
Class 1A rate on expenses and benefits	15.05%	13.8%	13.8%	13.8%

2.2 Employee rates

This table shows how much employers deduct from employees' pay.

	2022 to 2023	2021 to 2022	2020 to 2021	2019 to 2020
Between Primary Threshold and Upper Earnings Limit	13.25%	12%	12%	12%
Above Upper Earnings Limit	3.25%	2%	2%	2%
Rebate for employees in contracted-out workplace pension schemes	N/A	N/A	N/A	N/A
Married women's reduced rate between primary threshold and upper earnings limit	7.1%	5.85%	5.85%	5.85%
Rate for employees deferring National Insurance	3.25%	2%	2%	2%

3. Class 2 and Class 4 National Insurance (self-employed)

There are 2 types of National Insurance for people who work for themselves, depending on their profits.

3.1 Class 2

	2022 to 2023	2021 to 2022	2020 to 2021	2019 to 2020
Small Profits Threshold amount per year	£6,725	£6,515	£6,475	£6,365
Rate per week	£3.15	£3.05	£3.05	£3

3.2 Class 4

£ per year	2022 to 2023	2021 to 2022	2020 to 2021	2019 to 2020
Lower Profits Limit Self-employed people start paying Class 4 National Insurance	£11,908	£9,568	£9,500	£8,632
Upper Profits Limit Self-employed people pay a lower rate	£50, 270	£50,270	£50,000	£50,000
Rate between Lower Profits Limit and Upper Profits Limit	10.25%	9%	9%	9%
Rate above Upper Profits Limit	3.25%	2%	2%	2%

3.3 Special rates

£ per week	2022 to 2023	2021 to 2022	2020 to 2021	2019 to 2020
Special Class 2 rate for share fishermen	£3.80	£3.70	£3.70	£3.65
Special Class 2 rate for volunteer development workers	£6.15	£6.00	£6.00	£5.90
Additional Class 4 rate when deferring National Insurance	3.25%	2%	2%	2%

4. Class 3 National Insurance (voluntary)

You can pay voluntary National Insurance to fill or avoid gaps in your record.

If you're paying voluntary contributions for the previous 2 tax years (2021 to 2022 or 2020 to 2021), you'll pay the original rates for those years.

For all other years you'll pay the current rate (2022 to 2023).

£ per week	2022 to 2023	2021 to 2022	2020 to 2021	2019 to 2020
Class 3 rate	£15.85	£15.40	£15.30	£15

Monthly Direct Debit payments for 2022 to 2023

How much you pay depends on whether there are 4 or 5 weeks in the month.

Payment date	Amount
13 May 2022	£63.40
10 June 2022	£79.25
8 July 2022	£63.40
12 August 2022	£63.40
9 September 2022	£79.25
14 October 2022	£63.40
11 November 2022	£63.40
9 December 2022	£79.25
13 January 2023	£63.40
10 February 2023	£79.25
10 March 2023	£63.40
14 April 2023	£63.40