From April 2022, workers will be charged a higher rate of National Insurance at 1.25%. This will then turn into a health and social care levy from 2023, which all employees will contribute towards - including pensioners.
Research by Income Tax Calculator UK shows that people earning £100,000 will pay seven per cent of their overall salary to NI - the same as those on £20,000.
It says £30,000 and £50,000 earners will be hardest hit by the 1.25 per cent NI hike, with the increase meaning that they will pay nine percent and ten percent of their salary towards NI respectively.
Under the increase, the average worker will pay an extra £255 a year in taxes - an employee on a £20,000 a year salary will pay an extra £89.
Higher earners on £50,000 per year would pay an extra £464.
Working adults, including those over the state pension age, will have to pay the 1.25% levy.
However, people earning under £9,880 a year, or £823 a month, don't have to pay National Insurance and won't have to contribute.
From April, the extra 1.25% will appear on payslips as a higher National Insurance tax, but in April 2023, NI will return to its current rate, and the extra tax will be collected as a new Health and Social Care tax.
The money, according to the government, will then go on social care only.
The rates of dividend tax will also increase by 1.25% to help fund the package.
How much more tax will I pay?
- If you earn £20,000, you'll pay an extra £89
If you earn £30,000, you'll pay an extra £214
If you earn £50,000, you'll pay an extra £464
If you earn £80,000, you'll pay an extra £839
If you earn £100,000, you'll pay an extra £1,089
A spokesperson for Income Tax Calculator UK said: “The increase in National Insurance will have a huge effect on workers’ earnings in 2022, especially given soaring energy bills and the fact that inflation is at its highest point in 30 years.
"This data gives us a compelling insight into the fact that lower and average earners will be significantly more squeezed by the National Insurance hike than those at the very top.
"People earning some of the highest salaries in the country, for example, workers on £100,000 a year are set to pay the same percentage of their salary to NI as a person on £20,000 in 2022, despite earning five times as much, while those earning the average wage of £30,000 will see as much as 9 percent of their salary swallowed by NI."
