Questions and Answers
Reduced National Insurance Contributions – what should I expect on my payslip at the end of the month?
Will I get more take home money this month, following the changes to National Insurance rates?
By Catherine Heinen, FCCAFrom 6th April 2024, following an announcement by the Chancellor in his Budget, there have been cuts to the main rate of class 1 National Insurance Contributions (NIC).
Class 1 NIC is the amount of NI paid by employees. It’s usually seen as a reduction to their pay and shown on their payslip as a deduction in the calculation of net pay that an employee receives in to their bank account.
From 6th April 2024, the main rate reduced from 10% to 8%. We’ve shown some examples of savings in the table below.
| Salary (monthly/annually) | Before 6th April 2024 (£) |
After 6th April 2024 (£) |
Monthly savings (£) |
| £2,000/£24,000 | 95.20 | 76.16 | 19.04 |
| £2,500/£30,000 | 145.20 | 116.16 | 29.04 |
| £3,000/£36,000 | 195.20 | 156.16 | 39.04 |
| £3,333/£40,000 | 228.50 | 182.80 | 45.70 |
| £4,166/£50,000 | 311.80 | 249.44 | 62.36 |
This was following a reduction in the rate from 12% to 10% from 6th January 2024 as shown in the table below.
| Salary (monthly/annually) | Before 6th January 2024 (£) |
After 6th January 2024 (£) |
Monthly savings (£) |
| £2,000/£24,000 | 114.24 | 95.20 | 19.04 |
| £2,500/£30,000 | 174.24 | 145.20 | 29.04 |
| £3,000/£36,000 | 234.24 | 195.20 | 39.04 |
| £3,333/£40,000 | 274.20 | 228.50 | 45.70 |
| £4,166/£50,000 | 374.16 | 311.80 | 62.36 |
| £5,000/£60,000 | 393.14 | 330.32 | 62.82 |
Please note that other factors determine the level of NIC you make, including an employee’s category letter so this is just a guide. For more information about what National Insurance you pay as an employee check out our article here.
What about self-employed people?
The Autumn Statement announced a reduction in Class 4 NIC from 9% to 8%, and Class 2 NIC may no longer be due. These changes will take effect from 6th April 2024.
What about employers?
There was no change in the rates that employers pay. For more information on the rates applicable to employers please click here.
Date published 8 Jan 2024 | Last updated 17 Apr 2024
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
Catherine Heinen, FCCA
Catherine is a Technical Content Writer at TaxAssist Accountants, and a qualified accountant. With experience working at two accountancy practices in the UK top 50 accountancy firms according to Accountancy Age, Catherine has significant experience in accounts, tax returns and advising clients. Catherine ensures businesses, business owners and individuals are kept up to date and informed by providing concise and informative technical material.
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