Employees, businesses and the self-employed will pay an extra 1.25p in the pound - with the extra tax set to be spent by the UK Government on social care.

Mitigation for some lower earners is not set to come into force until July when the threshold at which people start paying NI contributions will be raised by £3000 (from £9880 to £12570). 

The 1.25 percentage point increase means that annual earnings above £9,880 will be liable for 13.25% of contributions, while the rate for those earing above the £50,270 threshold will be 3.25%. 

The increase comes despite pressure on the government to postpone it amid cost of living increases as energy, food and fuel prices all grow.

What will the increase mean for you? 

National Insurance is paid by employees on their wages with employers paying extra contributions for staff and the self-employed pay it based on their profits. 

The rise in NI contributions takes effect on April 6, however as part of plans announced in the Chancellor's Spring Statement workers will be allowed to earn more before they start paying the tax. 

This move, taking effect in July, will mean that anyone earning less than £34,000 will pay less on National Insurance in the 2022 to 2023 tax year.

Without the measures given in the latest mini-budget, National Insurance would have risen for those in the lowest incomes. 

Here is what the yearly contributions breakdown will look like:

 £15,000 a year 

• NI contributions (2021-2022):  £652
• 1.25 percentage point increase: £678
• From July: £322

£30,000 a year

• NI contributions (2021-2022):  £2452
• 1.25 percentage point increase: £2664
• From July: £2304

£20,000 a year

• NI contributions (2021-2022):  £1252
• 1.25 percentage point increase: £1341
• From July: £984

£50,000 a year

• NI contributions (2021-2022): £4852
• 1.25 percentage point increase: £5316
• From July: £4959

£100,000 a year

• NI contributions (2021-2022):  £5878
• 1.25 percentage point increase: £6968
• From July: £6611

The Health Secretary has defended the decision to hike up national insurance for millions of workers as he argued it is “right that we pay for what we are going to use as a country”.

Sajid Javid told Sky News: “It kicks in today, the new health and social care levy. All of the funding raised from it is going to go towards the extra £39 billion we are going to put in over the next three years to health and social care.

“It’s going to pay in the NHS for activity levels that are some 130% of pre-pandemic, it’s going to be nine million more scans, tests and procedures, meaning people will get seen a lot earlier.

“Why is any of this necessary, whether it is for health or social care? It’s because of the impact of the pandemic. We know it is unprecedented. It has been the biggest challenge in our lifetime. The impact of that is going to continue for many years.”

He added: “You asked me about the fairness of it. When we spend money on public services, whether it’s NHS or anything else, for that matter, the money can only come from two sources. You raise it directly for people today, that’s through taxes, or you borrow it, which essentially you are asking the next generation to pay for it.

“I think it is right that we pay for what we are going to use as a country but we do it in a fair way. This levy, the way it is being raised is the top 15% of earners will pay almost 50%. I think that is the right way to do this.”