Will you pay less tax? Online calculator reveals if you are better off after NI changes
24 June 2022, 11:42 | Updated: 5 July 2022, 23:20
An online National Insurance calculator has launched which estimates how much money you could save following the rise of the threshold.
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Lower-paid workers are in for a boost and could be £300 better off from Wednesday - while others will have to fork out more as the cost of living bites.
The Government has launched an online calculator to show just how much more of your wage you can keep now the National Insurance (NI) threshold has been raised.
In his spring statement, former Chancellor Rishi Sunak confirmed he was increasing the rate at which workers start paying National Insurance from £9,880 to £12,570 - bringing the threshold in line with Income Tax.
He announced the move in a bid to lessen the impact of the decision to raise income tax contributions by 1.25 percentage points - which is a rise of about 10% - amidst the cost of living crisis.
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The threshold hike means some Brits will pay less NI - a move brought in to help people cope with soaring costs.
The Government's tool gets people to input key wage information and then it will give you an estimate of how much less you’ll pay.
It means generally workers won’t pay national insurance or income tax if they earn below £12,570 a year.
The change will save each employee an average of £330 in national insurance a year.
You can visit the National Insurance calculator here.
Someone who earns £20,000 a year will be expected to pay £291 less, according to the tool.
While those with an annual salary of £25,000 could save £244, and those on £30,000 will keep a further £197 of their wages.
Those on £50,000 will pay just £10 less a year.
Meanwhile, higher-earning taxpayers on a £60,000 salary are expected to pay £84 more.
Anyone receiving £100,000 a year will be forced to fork out another £459.
The Treasury stated that the tool will “help people budget” during the cost of living crisis.
The Chancellor said seven out of 10 people will be paying less for NI from July even with the 1.25 per cent rise.
It has been estimated that 30 million workers will benefit and an extra 2.2 million people will not have to pay NI at all.
