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How much National Insurance do I pay?

NATIONAL Insurance is a compulsory tax all working people in the UK have to pay once they earn over a specific threshold.

But the government is planning a rise that could mean Brits will have to pay more than they had to before for the tax bill.

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People living in the UK automatically receive a National Insurance number just before your 16th birthday[/caption]

Paying the tax though, entitles you to claim certain welfare benefits such as the state pension, statutory sick pay and maternity cover.

The Prime Minister is expected to announce a hike in the tax this afternoon, although details of the potential raise have not yet been revealed.

The increase will be funnelled into a major social care overhaul and plans to bring down NHS waiting lists.

The Daily Mail reported that Tories were urging the PM to scrap a planned hike in national insurance to win back their support.

The Commons Treasury Committee warned in a report released on Thursday, January 20, that the rise in employer national insurance contributions would contribute to a rise in inflation.

How much National Insurance do I pay?

Unlike income tax, the amount of National Insurance you pay depends on how much you earn each month or week rather than each year.

The amount of National Insurance you pay depends on how much you earn per week or month, and is broken down as follows (2021/22):

You pay nothing on the first £184 of weekly earnings (or first £797 of monthly earnings).

You pay 12% on weekly earnings between £184 and £967 (£797 – £4,189 of monthly earnings).

You pay 2% on weekly earnings of £967 or more (£4,189 or more of monthly earnings)

For example, if you were to earn £1,000 a month you would pay zero National Insurance on the first £797, leaving £203 left to pay at 12%.

Therefore, you would pay £24.36 that month.

However, with the expected rise, which we initially reported to be by at least 1%, that will go up.

Figures previously reported from accountancy Blick Rothenberg show how much your National Insurance contributions would go up to if the rates increased from 2% to 3% and 12% to 13%.

On earnings of £15,000 it would be £54 a year more, and on earnings of £25,000, £154 more.

National Insurance contributions on earnings of £35,000 would increase by £254 a year and on a salary of, £50,000 would go up by £404.

What salary do you start paying National Insurance?

If you are employed, you start paying National Insurance when you are 16 or older and earning more than £184 a week.

The self-employed start paying when they make profits of at least £6,475 a year.

Those earning less than these amounts do not have to pay any National Insurance.

If you earn less than £184 a week, but more than £120, your account will be credited as paying National Insurance, and you will still have access to benefits such as a pension.

However, if you earn less than £120 a week you will be exempt from National Insurance contributions.

Can I check how much National Insurance I’ve paid?

You can check how much National Insurance you’ve paid using the Government Gateway portal. You will need a login and password to do this.

If you do not have a login to the Government Gateway portal you can set one up, but will need your National Insurance number to do so.

You can check how much you have made in contributions during the current financial year, and check how many National Insurance credits you have received.

However, this portal will not give you an estimate of how much state pension you are entitled to.

You can also request for a paper version over-viewing your contributions if you want.

Can I opt out of National Insurance?

You cannot opt out if you are employed or self-employed, are aged 16 or over and earning above the minimum threshold.

If you are employed, your contributions will automatically be deducted from your take-home pay, so opting out is not possible anyway.

However, the self-employed have to manage these payments themselves.

If you become self-employed, you must tell HMRC as soon as possible.

You will then be required to complete a Self Assessment tax return every year.

This will be used to determine how much tax and National Insurance you should pay.



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