Millions of workers will receive more money in their pay packet from this week when changes to National Insurance are brought into effect.
The threshold for when you start to pay National Insurance is rising from £9,880 to £12,570 from this Wednesday (July 6).
An estimated 30million Brits will be better off as a result - and some two million low-income workers will pay no National Insurance at all.
How much better off you will be - if at all - depends on how much you currently earn each year, as well as any bonuses you might receive.
It also gets further complicated when you take into account the fact that National Insurance rose in April.
Will you be better off after the National Insurance changes? Let us know: mirror.money.saving@mirror.co.uk
The rate at which you pay National Insurance contributions was raised by 1.25 percentage points in April - up from 12% to 13.25% to help pay for NHS backlogs and social care.
This means millions of workers have been paying more in tax over the last three months.
Experts at Hargreaves Lansdown suggest anyone earning less than £35,000 will be better off if you take both the April and July changes into account.
Senior personal finance analyst Sarah Cole said: "This is just a tweak to a tax that has just been hiked.
"For anyone earning just under £35,000 or less, moving the threshold will repair the damage inflicted by the National Insurance hike in April.
"70% of people will see their NI drop below what they were paying before the rise."
Here is how National Insurance has changed over the last few months, according to figures from the Institute For Fiscal Studies:
- £20,000 annual pay: NIC before April 6 - £104; NIC now - £112; NIC from July 6 - £82
- £30,000 annual pay: NIC before April 6- £204; NIC now - £222; NIC from July 6 - £192
- £40,000 annual pay: NIC before April 6 - £304; NIC now - £333; NIC from July 6 - £303
- £50,000 annual pay: NIC before April 6 - £404; NIC now - £443; NIC from July 6 - £413
- £60,000 annual pay: NIC before April 6 - £423; NIC now - £472; NIC from July 6 - £443
A new Gov.uk calculator has been launched to estimate roughly how much less National Insurance you'll be paying.
What is National Insurance?
National Insurance is a tax on earnings, paid by both employed and self-employed workers.
You pay mandatory National Insurance if you’re 16 or over and are either an employee earning above £190 a week, or self-employed and making a profit of £6,725 or more a year.
Once you reach state pension age, you no longer need to keep paying National Insurance.
If you have an employer, or you're self-employed but work for an employer, you'll pay Class 1 National Insurance contributions.
The amount you pay on National Insurance is then worked out based on your on gross earnings, before tax or pension deductions, above certain thresholds.
