24 June 2022, 11:42 | Updated: 24 June 2022, 11:44
An online National Insurance calculator has launched which estimates how much money you could save when the threshold is raised next month.
Lower-paid workers are in for a boost and could be £ 300 better off from July 6 – 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’ll keep once the National Insurance (NI) threshold is raised on July 6.
In his spring statement the Chancellor confirmed he is increasing the rate at which workers start paying National Insurance from £ 9,880 to £ 12,570 – bringing the threshold in line with Income Tax.
The Chancellor 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.
Read more: Cuts to fuel, tax and VAT: Spring statement key points at a glance
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.
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.