Increase in NI contributions

Teacher2301

I was rather shocked to see that the NI contributions have increased this month - I get paid on the 23rd of every month - so be aware that if you earn above the upper accrural level (about £40,000 a year) you could have sting in the tail and have a pay cut. My HR dept spent time checking my pay and said yep - NI has been increased this year. My point is I must have missed this tiny stealth tax...

mitchaa

But your personal allowance has increased in line so you should be earning more this month than you did last month.

For example..

£35k = £2163 in 08/09 and £2173 in 09/10
£40k = £2450 in 08/09 and £2460 in 09/10
£45k = £2710 in 09/10 and £2738 in 09/10
£50k = £2955 in 08/09 and £2984 in 09/10

40% tax band is around £44k earnings so in 09/10 it is clear to see that those who pay the higher rate of tax are gaining more than those who pay the standard level.

i.e, someone on £50k is gaining £29pm, whilst someone on £35k is gaining only £10pm

So i find your initial post a little confusing as everyone should be better off through the increase of the PA. (perhaps NI has increased, but it is more than offset with a reduction of income tax)

Teacher2301

Having slept on this post overnight - I tend to agree - my tax has gone down but only down by £7 but my NI contributions have gone up from £273 to £301!

Can anyone help to clarify this - so I can go back to my HR dept?

mitchaa

Have a look here...

www.thesalarycalculator.co.uk

This should tell you exactly what you should be paying. Just to confirm, you can also use....

www.listentotaxman.com

You should be better off by around a tenner if you are earning circa £40k. Infact with that bottom calculator you can see the differences between 08/09 and 09/10 and NI should have decreased, not increased.

chrisbur

Teacher2301 wrote: »

Having slept on this post overnight - I tend to agree - my tax has gone down but only down by £7 but my NI contributions have gone up from £273 to £301!

Can anyone help to clarify this - so I can go back to my HR dept?

Can you advise the gross figures that go with these NI contributions? Has there been any change in your NI contribution letter eg from D to A?