National Insurance Increase 2022

National Insurance Increase 2022

National Insurance Increase 2022

On 7th September 2021, Prime Minister Boris Johnson announced a new health and social care tax to be implemented to pay for care sector reforms and an increase in NSH funding.

According to the PM, an estimated £12bn a year would be required to address the financial backlog caused by the Coronavirus pandemic and scale-up social care for the UK. He even quoted that "those who earn more will pay more". With that in mind, leaders in social care had some concern regarding money that it was "nowhere near enough", and it wouldn't even address the current problems.

The tax plan will begin with a 1.25% rise in National Insurance starting April 2022.

Both employer and workers will pay this and eventually become a separate tax on earned income beginning in 2023, which is calculated in the same way as National Insurance and reflects on an employee's payslip.

Who will have to pay the National Insurance increase?

The increase in National Insurance is paid by:

  • Employees including state pensioners who are still working if earning more than £9,564 a year

  • Employers

  • Self-Employed

The rise is 1.25% in National Insurance (NI) contributions. 

The new rates from April 2022 for employees are:

Your pay

Class 1 National Insurance rate

£184 to £967 a week (£797 to £4,189 a month)


Over £967 a week (£4,189 a month)


If you are self-employed from April 2022: 


Rate for tax year 2022 to 2023

Class 2

£3.05 a week

Class 4

10.25% on profits between £9,569 and £50,270

3.25% on profits over £50,270

As an employer from April 2022.  This will depend on your category letter, but most businesses are category A (which is listed below):

Category letter

£120 to £184 (£520 to £797 a month)

£184.01 to £967 (£797.01 to £4,189 a month)

Over £967 a week (£4,189 a month)





Who is exempt?

Those people earning under only £9,564 a year, or £797 a month, don't have to pay National Insurance.

That means that they are exempt from the NI increase.

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About the Author

Annette Ferguson 

Owner of Annette & Co. - Chartered Accountants & Certified Profit First Professionals. Helping online service-based entrepreneurs find clarity in their numbers, increase wealth and have more money in their pockets.