Change in employee National Insurance threshold from July 2022

A surprise announcement in the Chancellor’s Spring statement means a change in employee National Insurance Thresholds from July 2022. There is an increase to both the primary threshold and lower profits limit which takes affect 6th July 2022. It is unusual to revise thresholds part way through a tax year, and may catch some employers out. The primary threshold (PT) and lower profits limit has increased from £9,880 to £12,570 per annum to align with the personal tax allowance. The government have stated that from July, around 70% of workers will pay less NI than they did in 2021/22. This increase is estimated to mean 2.2 million individuals will no longer pay class 1 employee NI. There are no changes to the lower earnings limit (LEL) however, so there are no changes to state pension, statutory payments and benefits. Also, these changes do not affect the secondary thresholds, so employer NIC will not be impacted.

The employee earnings threshold increases from 6th July are as follows:

Weekly from £190 to £242
2 Weekly from £380 to £484
4 Weekly from £760 to £967
Monthly from £823 to £1048
Quarterly from £2470 to £3143
Annual from £9880 to £12570

Directors annual is £11,908: The threshold for directors comprises 13 weeks at £190 and 39 weeks at £242 for 2022/23.

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