Most employees will pay less in national insurance from 6 January 2024.
National insurance contributions will be cut from 12% to 10%, on earnings of between £12,570 and £50,270 a year. This means that employees will start benefitting from the reduction in the first pay of the New Year.
This legislation change will be updated within your payroll software or by your payroll provider, so that the correct calculations are made to employees’ salary as soon as the first pay period from 6th January starts.
However, Directors NI is different to those of employees. During 2023/2024, there are 9 months at 12% and 3 months at 10%, so the blended directors’ rate is 11.5%.
So, for the 2024/2025 tax year (for payments from 6th April 2024) the annual rate for directors then aligns with employee period-based percentage becomes 10%.
To read more on these changes and more from the HMRC, please go to the link below:
If you have your payroll already set up with NRB, you do not need to worry, we have this covered for you.
However, if you are interested in looking at NRB’s payroll service offering please go to https://www.nrb.co.uk/services/bookkeeping/payroll-services/ or email payroll@nrb.co.uk.
