Hi all, On my payslip at end of May, although I earnt £100 extra for overtime (gross) I seem to have paid an extra £60 in NI A contributions than the month before where I earnt £100 less. With that and the tax it means I am only £13 better off than if I hadn’t worked the extra! Has anyone else noticed an increase in their NI contributions? Have the government increased them?
NI is not averaged over the year like income tax is, so if you earn over the threshold in one pay period then under the next you’d pay more NI than if you were paid the same for both pay periods and you can’t get a refund.
I was fuming as I paid £200 more NI when I was on maternity leave than I would have if they’d spread my pay evenly over the 12 months rather than paying me 90% for the first 6 weeks then 33 weeks of saturory mat pay then 13 weeks of nothing. My baby was born on 6th April so it went exactly over the financial year.
I wrote to my MP and was told it would be too much of a burden on business to average it over the year like income tax, so tough.
Just to add, the National Insurance rate does in fact drop to 2% on earnings above the higher rate of income tax (£46,350) though the income tax rate at this point increases from 20% to 40%. Earnings above £150,000 are taxed at 45%.