NI rates hiked - how much more will workers pay?

Firstly, NI rates will increase by 1.25% from April 2022. This will apply to both primary and secondary Class 1 contributions, which will increase to 13.25% and 3.25% for earnings up to, and above, the upper earnings limit respectively. Class 4 rates will also increase to 10.25% and 3.25%. The additional 1.25% will be carved out as a separate levy from April 2023 - essentially it will be a new tax.

To illustrate what this will mean for employees, the following table is a useful reference, assuming the current NI thresholds apply:

Salary	Current NI bill	Expected increased NI bill	Change
£15,000.00	£651.84	£719.74	£67.90
£25,000.00	£1,851.84	£2,044.74	£192.90
£35,000.00	£3,051.84	£3,369.74	£317.90
£45,000.00	£4,251.84	£4,694.74	£442.90
£55,000.00	£4,951.84	£5,519.74	£567.90

 

Secondly, the dividend tax rates will also increase by 1.25%, i.e. to 8.75%, 33.75% and 39.35% for basic, higher and additional rate taxpayers respectively.