Employee NI Now 8%: The Full Saving from April 2024's Rate Cut

From 6 April 2024, the main rate of employee National Insurance Contributions settled at 8% — a reduction of 4 percentage points from the 12% rate that applied through most of the 2023-24 tax year. This is the combined effect of two cuts: the first brought the rate to 10% in January 2024, the second to 8% from the April 2024 tax year start. Together they represent the largest two-year cut to the employee NIC rate since the modern NIC system was established.

The rate applies on earnings between the Primary Threshold (£12,570 per year) and the Upper Earnings Limit (£50,270 per year). Above the UEL, the 2% additional rate continues to apply unchanged. Below the Primary Threshold, no NICs are due at all.

The annual saving versus the 2023-24 rate of 12%

At 8% versus the 12% rate that applied for most of 2023-24, the saving on earnings between £12,570 and £50,270 is 4p per pound — a maximum annual saving of £1,508 for higher earners. In practice, because the January cut only applied for three months of 2023-24, the headline annual comparison uses the April-to-April 12% baseline:

• £20,000 salary: annual NIC saving of approximately £299
• £30,000 salary: annual NIC saving of approximately £699
• £35,400 salary: annual NIC saving of approximately £900
• £50,270+: annual NIC saving capped at approximately £1,508

The £900 figure for a median-salary worker (£35,400) is often quoted by the government as the headline benefit of both NI cuts combined.

Self-employed Class 4: rate cut to 6%

Self-employed workers on Class 4 NICs also benefited: the main Class 4 rate dropped from 9% to 6% from 6 April 2024, and the requirement to pay Class 2 NICs (previously a flat £3.45/week) was effectively removed for most self-employed people. Those with profits above the Small Profits Threshold (£6,725) continue to receive state benefit entitlements (including State Pension) without needing to pay Class 2.

For a self-employed person with £35,000 in profits, the Class 4 cut alone saves around £460 per year. Combined with the removal of Class 2, total NIC savings can reach £640 per year at that profit level. See the full calculation for self-employed income after tax.

What has not changed

It is important to note what the NI cuts do not affect. Income Tax rates and thresholds remain unchanged — the personal allowance is still £12,570, the basic rate 20%, and the higher rate 40%, all frozen until at least 2028. Employer NICs remain at 13.8% on earnings above £9,100. The 2% additional NIC rate above the Upper Earnings Limit also remains unchanged.

Fiscal drag — the effect of frozen thresholds in an inflationary environment — continues to push more workers into higher tax bands even as the NIC rate headline has fallen. Many workers will find their NI saving is partially or fully offset by paying higher-rate income tax on earnings that would previously have been below the threshold.

Conclusion

The April 2024 NI cut to 8% delivers a real boost — particularly for middle-income workers who gain the full benefit across the NIC band. To see your exact take-home pay under the current 8% rate, use our take-home pay calculator, which applies all 2024-25 rates including the updated NIC rate.