How much more does your boss have to pay for you?

Use this tool to see how Rachel Reeves’ corporate tax raid will impact your employer.

If you are an employee paying Class 1 National Insurance (NIC) contributions, simply enter your monthly salary and click ‘Calculate’.

Don’t worry, the input for the tool is not saved anywhere.

Different rules apply to the self-employed and to those who voluntarily pay national insurance contributions.

A UK worker could fall into one of HMRC’s 16 National Insurance category letters, but the vast majority fall into A – so Class 1A.

As a result, in the current tax year 2024-25, your employer will most likely pay 13.8% on top of your wages (a significant difference from employees’ NICs, which are taken from income), for all amounts above a certain level. From April 2025 this will increase to 15%.

Currently these contributions are above what is known as the Secondary Threshold (ST), currently set at £758 per month, or £9,100 per year. This will be reduced to €5,000.

Eligible employers can reduce their liability by up to £5,000 a year thanks to the Employment Allowance, which is designed to support small businesses. This will increase to £10,500 from April next year.

Total contributions in the current tax year are compared with what will be the case when the changes outlined in Labor’s budget come into effect, on April 6, 2025.

With this calculator you can calculate how personnel costs for your employer are likely to increase.

Ms. Reeves’ changes to this chapter of the tax code won’t directly increase costs for “working people,” but their employers may in turn pass the blow — with less money left over for wage increases, extra pension contributions and new hires.

The Office for Budget Responsibility (OBR), the government’s budget watchdog, previously warned that “the economic impact of the tax is fully passed on to lower real wages over the medium term.”

Employers’ contributions to NIC1 are a huge moneymaker for the Treasury, raising £108 billion in 2023-24, or 13% of all tax revenue. This is much more than the £62 billion in employee contributions.

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