NIC RATE CHANGE GOES AHEADNov 03 2022
The legislation to abolish the 1.25% increase in the rate of National Insurance Contributions (NICs) paid by workers, employers and the self-employed were already in progress when the U-turns were being made.
The reduction, therefore, continues to go ahead and the rate of NICs on salary payments made on or after 6 November 2022 reduces to 12% for employees on earnings between £1,048 and £4,189 a month and 2% on earnings thereafter. Employer contributions will reduce to 13.8% on earnings in excess of £758 per month from 6 November 2022.
As NICs for company directors and the self-employed are based on annual earnings and profits, the rates for 2022/23 are now to be based on a proportionate of average rates.
The rate of NICs for company directors will be set at 12.73% on earnings between £11,908 and £50,270 and 2.73% on earnings thereafter. Class 4 NICs payable by self-employed individuals will be 9.73% on profits between £11,908 and £50,270 and 2.73% after this.
Employers will need to make sure that they update their payroll software so that the correct amount of NICs is paid on salary payments made after 5 November 2022.