National Insurance cuts – everything businesses need to know

In this article, we discuss;

The 6 November National Insurance cuts
What the new rate is, and who it will apply to
How to ensure you deduct the correct rate from your payslips
Whether the changes affect the Employment Allowance
Samantha Shanks

Samantha Shanks

Share this article

In this article:

Picture of About Samantha Shanks

About Samantha Shanks

Sam has worked in our payroll department since 2006. As Payroll Manager, she works hard to deliver exceptional results for all our clients.

Read More

The government has confirmed that it will reverse April’s temporary 1.25 percentage point uplift in National Insurance Contributions (NICs), effective from 6 November 2022. The cuts will see NIC rates return to their 2021/22 levels and reduce the NI bills of both individuals and businesses.

Here, the bookkeeping team at AMR Bookkeeping Solutions discuss what the cuts mean for businesses, and what payroll operators need to do to implement the new NIC rates.

Who will the changes in NICs apply to?

The NIC cuts will apply to employers, employees, and
self-employed people, affecting:

·        Class 1 National Insurance (paid by employees)

·        Class 4 National Insurance (paid by the

·        Secondary Class 1, 1A and 1B National Insurance
(paid by employers)

NICs will only be charged for earnings over the National
Insurance threshold of £12,570. Anyone earning less than the NI threshold will
pay nothing.

What will the new NIC rates be from 6 November?

Class 1 National Insurance

·        The main rate will be reduced to 12%

·        The additional rate will be reduced to 2%

Class 4 National Insurance

·        The main rate will be reduced to 9%

·        The additional rate will be reduced to 2%

Secondary class 1 National Insurance

·        The NI rate below the Secondary Threshold will
be reduced to 13.8%

·        Secondary class 1A and 1B National insurance

·        Class 1A and 1B rates for expenses and benefits
will be reduced to 13.8%

How to deduct the correct NICs from employees’ payslips

Most payroll software will automatically update from the 6
November 2022 and begin deducting the new NIC rates.

Currently, the NIC uplift of 1.25% has to be listed
separately on all employee payslips. Businesses that do not use an external
payroll provider should notify their payroll team to ensure they remove the
uplift on all payslips issued on or after the 6 November.

Do the rate changes affect the Employment Allowance?

No. The Employment Allowance allows small businesses to
reduce their NI liability by up to £5000 for the 2022/23 tax year. This means
employers can pay less Secondary Class 1 NICs until the allowance has run out,
or the tax year ends (depending on which comes first). The allowance is not
affected by the NIC rate cuts.

Need any further guidance? We can help with any aspect of
business payroll. To get in touch with the AMR Bookkeeping Solutions team,
email, or give us a call
on 01892 559480. 

More articles you might like

Why choose AMR Bookkeeping Solutions?


We combine the highest level of professionalism with a friendly, clear approach for all of our clients.


Our approach is tailored to the needs of each individual client, and we build personal relationships to make sure that our clients can have complete trust in what we do.

AAT Qualified

All of our services are provided by our team of Association of Accounting Technicians (AAT) qualified bookkeepers, highly experienced bookkeeping experts and certified accountants.

CPD Trained

Each member of the team undergoes Continuing Professional Development (CPD) which keeps them right up to date with changing tax legislation.

Accredited Experts

All our bookkeepers are accredited in leading accountancy software Sage, Xero and QuickBooks.

AAT logo
Xero Gold Partner
Sage logo
Intuit Quickbooks ProAdvisor Gold
Freeagent logo

Get in touch for a free, no obligation consultation

Find out how AMR Bookkeeping Solutions can provide the right support for your business, send us your details and one of our experts will get in touch with you without delay.

Alternatively, you are welcome to contact us by phone on 01892 559480

You can also pop into our offices in Tonbridge.