National Insurance contributions from 6th January to 5th April 2024

What is happening with the January 2024 National Insurance decrease in Sage Payroll.

On 6 January 2024, Class 1 National Insurance Contributions (NICs) will decrease from 12% to 10%.

Read the HMRC article Changes to National Insurance contributions from 6 January 2024.

What have we done?

Due to the HMRC announcement, we updated Sage Payroll to reflect the National Insurance change. The change takes effect from your first pay run dated on or after 6 January 2024.

---

What do I need to do?

There’s nothing different you need to do within your Sage Payroll. You can process your pay runs as normal. 

---

Directors

The National Insurance change also affects directors.

• This is all taken care of within payroll. You don't need to do anything differently.

Directors on Per Pay Run Calculation:

Categories: A, F, H, M, V

• For all pay runs dated 06/04/2023 - 05/01/2024 the Standard rate of 12% applies
• For all pay runs dated 06/01/2024 and later the Standard rate of 10% applies
• There are no changes to the earnings threshold or employer contributions

The revaluation in the final pay period of the tax year, or the director's final pay period, uses the blended rate of 11.5%. 

Categories: B, I, 

• For all pay runs dated 06/04/2023 - 05/01/2024 the rate of 5.85% applies
• For all pay runs dated 06/01/2024 and later the new Standard rate of 3.85% applies
• There’s no change to the earning thresholds or employer contributions

The final pay period revaluation uses the 5.35% blended rate.

Directors on Cumulative Calculation:

For directors using the standard method, Class 1NIC rates apply throughout the 2023/24 tax year.

Categories: A, F, H, M, V

• Blended rate of 11.5% applies to all pay runs

Categories: B, I

• Blended rate of 5.35% applies to all pay runs

Directors' National Insurance

Class 1 National Insurance rates for 2024/2025