National Insurance, or NI, is a mandatory tax paid by UK salaried employees over 16 who earn more than £190 per week, or the self-employed who make a profit of £6,725 or more per year.

We decided to include a NI calculation line in our forecast because of the increase to the rate of National insurance which was implemented in April 2022.

Read more about how we calculate NI increases.

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About National Insurance

Introduced in 1911 and expanded after the war in 1948, National Insurance is a mandatory tax paid by most workers in the UK.

Some of the money raised this way is earmarked for state benefits for workers and their families, including state pensions.

The money is collected by HMRC, the UK tax authority, and for most people this happens automatically as the sums are deducted by employers as part of their payroll processes (PAYE).

Both employees and employers make an NI payment. Employees see this as a deduction from their gross salary, and it shows up as a separate line on their payslips. The self-employed must make their NI payments as part of their annual tax return.

Your National Insurance number

Everyone over the age of 16 in the UK is issued an unique National Insurance number by the Department of Work and Pensions. These contain two letters, six numbers and then a final letter.

<aside> ℹ️ If you have not received a National Insurance number, the UK Government website has a useful page

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/national-insurance-enquiries-for-employees-and-individuals

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Changes in 2022

In April 2022, the rates of National Insurance increased.

In his 2022 Spring Statement, the UK Chancellor further announced some changes to the thresholds at which you start paying NI. These take effect from July 2022, and will result in some households paying less NI. Our calculator takes account of these changes.

In 2021/2022 tax year

How much you earn Class 1 rate (6 April 2021 - 5 April 2022)
Less than £9,568 0%
£9,568-£50,270 12%
More than £50,270 2%

2022/2023 tax year