RAW Accounting Solutions

Something tells me a lot of close company directors will be taking a pay increase for 2022/23 with employee national insurance free threshold going up to £12,570. Although employers national insurance is going up to 15.5% with the threshold only increasing to £9,100 this is less than the corporation tax saving of 19%.

However,
For those who are employees and not directors, remember NI is not accumulative for employees so their payrises may need to wait till July 22 but directors will benefit from £11,908 for 22/23 not £12,570 so could increase now if wages are below this amount.

Now for the mix of bad and further good news. This means due to the increase of 1.25% in NI rates, all employees will see a decrease in their net pay untill July 22 when you will see the benefit in your net pay from the £12,570 increase in NI.

Those earning around £38,000 or more will see the increase in their July net pay compared to their June net pay but will still be an overall decrease compared to their March 22 net pay where as those earning less than £38,000 will see an over increase of their net wages compared to March 22.

(The above is not advice, just my interpretation of what I have read. It also assumes that everyone is on the standard tax code and that gross pay remains the same from March 22 to July 22)