Calculate your National Insurance: What is income tax and how much will the 2p cut save me?

For 27 million workers, the beginning rate for NI was reduced from 10% to 8% from April 6, 2024.

When Chancellor Jeremy Hunt announced the proposal in his Budget, he estimated that an employee earning an average income of £35,000 would benefit from it by around £450 annually.

Additionally, NI will be reduced to two million independent contractors.

Their percentage will drop to 6% from 9%. According to the government, that is equivalent to £350 for an independent contractor making £28,200.

Millions of workers have been paying 10% of their wages, which range from £12,571 to £50,270, since January 6. Previously, they made a 12% payment.

According to the government, an employee making £35,000 will save almost £900 year when paired with the most recent decrease.

Furthermore, two million independent contractors will pay 8%, rather than 9%, on revenues between £12,571 and £50,270 as of April 6, 2024.

They will no longer make Class 2 contributions, which are a different type of NI.

The government claims that they would save £650 when paired with the 6% decrease that was announced in the Budget.

For income and profits beyond £50,270, the NI rate is still 2%.

(Sources: bbc.co.uk)