Christmas is coming and 2024 is looming …… the New Year will be upon us before we know it!!
ARE YOU READY??
Changes in Payroll legislation for 23/24 could affect your business.
Today we start off with the new National Insurance Rates:
The amount of National Insurance you pay is established by whether you are employed or self-employed, and how much you earn.
If you are Employed NI rates for 2023/24:
From 6th January 2024
NI rate for employees earning an income of between £12,570 to £50,270 a year (£1,048 to £4,189 a month) will be reduced from 12% to 10%
The rate for any income over £50,270 a year (over £4,189 a month) will stay the same at 2%.
You do not pay NI on your first £12,570.
If you are Self-Employed NI rates for 2023/24:
From 6th April 2024
NI contributions are calculated using your annual profits.
For profits between £12,570 and £50,270 the NI rate will be reduced from 10% to 8%, and for any profits over £50,270 will be maintained at 2%.
The additional Class 2 NI contributions, currently paid by self-employed individuals at a rate of £3.45 per week, if they earn over £12,560 a year, will be abolished.
You do not pay NI on your first £12,570.
If you are an Employer:
NI contributions rate paid per employee will remain at 13.8% for income above the ‘secondary threshold.’ (salary of £9,100 to £50,270 a year – £758 to £4,189 a month).
See the following table for easy reference:
| 2023/24 | 2024/25 | |
| Class 1, 1A and 1B NIC rate for employers on earnings above the Annual Threshold | 13.8% | 13.8% |
| Class 1 NIC rate for employees between the Annual Threshold and Upper Earnings Limit | 12% until 5 January 2024 10% from 6 January 2024 | 10% |
| Class 1 NIC rate for employees above the Upper Earnings Limit | 2% | 2% |
If you are an employer that processes your own payroll, please make sure you make the appropriate changes to your payroll software in time for the January changes.
(NB: Don’t worry if you don’t amend your payroll system in time, you will be able to reimburse the overpayment of NI to employees, in subsequent months.)
If you would like to discuss how these changes will affect you or your business, or you have any other questions about payroll, please give us a call, we’re happy to help.
For further information about National Insurance, please see the following links:
https://www.gov.uk/government/news/record-national-insurance-cut-arrives-in-less-than-six-weeks
