Millions of workers to see HMRC boost in pay slips today

Millions of workers will be seeing a boost to their pay today. Those paid on the last day of the month will see the benefit of recent changes to National Insurance for the first time.

The main rate of employee national insurance was cut from 10% to 8% from Saturday, April 6 - the first day of the 2024-25 tax year. That followed a cut from 12% to 10% at the start of 2024.

Combined, it means the average workers on £35,400 is now saving around £900 a year when it comes to NI, the Government has said. Around 27million workers are benefitting.

And more than two million people will benefit from the main rate of self-employed national insurance being trimmed down. The main rate of Class 4 NI contributions for the self-employed will be reduced to 6%. When combined with the abolition of the requirement to pay Class 2, this is expected to save a self-employed worker earning £28,000 about £650 a year.

Despite the NI cuts, some other thresholds may act as a "stealth tax" and make people feel worse off just by being left unchanged. Frozen income tax bands pull people into higher brackets over time as their pay increases. The standard personal allowance is £12,570, which is the amount of income that someone does not have to pay tax on.

Prime Minister Rishi Sunak said previously: "Hard work is one of my core values, and the progress we have made on the economy means we can reward work with a tax cut worth £900 for the average earner. This marks the next step in our plan to end the unfairness of double taxation of work by abolishing national insurance in the long term."

Chancellor Jeremy Hunt said the cuts show "we stand behind those who work hard and fires the starting gun on our long-term ambition to end the unfair double tax on work".

Rachel Reeves, Labour's Shadow Chancellor, said: "Every time Rishi Sunak goes on the television claiming he is cutting taxes, he is insulting the intelligence of hard-working families."

How much you will pay in NI if you're employed

• If you are on an annual salary of £20,000, you paid an annual cost of £891.60 in National Insurance in 2023 (from April 6, 2023 until January 5, 2024). Following the NI changes in January and April of this year, your annual contribution will be £297.20 less and you will pay £594.40 a year, which means you will save £24.77 more on your salary each month than you did in 2023.

• If you are on an annual salary of £25,000, you paid an annual cost of £1,491.69 in 2023. Following the NI changes this year, you will make a payment of £994.40 a year, which will mean that your annual contribution will be £497.20 less than last year. This will mean that you will save £41.43 more of your salary each month than you did in 2023.

• Meanwhile, if you are on annual salary of £30,000, you paid an annual cost of £2,091.60 in 2023. Following the two cuts this year, you'll pay £1,394.40 a year, which will be £697.20 less than your annual contribution last year. It will mean that you will keep £58.10 more of your salary every month than you did in 2023.

• And if you are on annual salary of £35,000, you paid an annual cost of £2,691.60 in 2023. Following the two cuts in 2024, you'll pay £1,794.40 a year, which will be £897.20 less than your annual contribution last year. It will mean that you will keep £74.77 more of your salary every month than you did in 2023.