HUNDREDS of thousands of workers are set for a pay rise within WEEKS when a change to taxes comes in.
The amount you can earn before you start paying National Insurance contributions (NICs) will rise to £12,570.
That’s an increase from £9,500 and applies from July 6. You should see the change in your first pay check after this date.
The exact amount more you’ll get in your pay will depend on how much you earn.
For example someone on a salary of £20,000 will pay around £291 less a year in NICs, according to the government’s calculator.
Chancellor Rishi Sunak first announced an increase to the threshold in March, and some of the lowest earners will pay no NICs at all.
But it comes after a National Insurance hike on April 6, which saw millions paying extra.
The social care levy added 1.25 percentage points to National Insurance rates.
Overall both changes mean that anyone earning around £35,000 or under each year will pay less National Insurance than last year, Sarah Coles from Hargreaves Lansdown previously told The Sun.
The extra cash comes as millions face higher bills in the cost of living crisis.
Pensioners will get an extra £300 one-off payment during the coldest months.
What is National Insurance?
National insurance is a tax paid by workers above a certain level of earnings.
The contributions help fund benefits like the State Pension, sick pay and unemployment benefits.
All UK nationals receive an NI number (and NI card) automatically before they turn 16.
Your NI number helps the government track your earnings and charge the right amount of tax.
You currently pay National Insurance if you’re 16 and earn over a certain amount.
Workers currently pay 13.25% on earnings between £9,564 and £50,268 and a further 3.25% is paid on wages over that.
The tax is deducted from your wages each month and you can see how much you pay on your payslip.
Once you reach state pension age, you don’t need to pay National Insurance at all.National Insurance is not the same as income tax, and you pay this separately on your earnings too.
National Insurance works differently if you’re self-employed.
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