National Insurance Cut to 10%: What the January 2024 Change Means for Your Pay
From 6 January 2024, the main rate of employee National Insurance Contributions (NICs) fell from 12% to 10% — the first in-year cut to the main rate since 2011. Around 27 million workers are affected, and for someone earning the UK median wage of £35,400 the saving works out at roughly £450 per year, or about £37 per month.
The change was announced by then-Chancellor Jeremy Hunt in the Autumn Statement on 22 November 2023 and was brought forward to January rather than waiting for the April tax year start — an unusual move that required an emergency change to PAYE software across every payroll in the country.
The rate applies to earnings between the Primary Threshold (£12,570/year) and the Upper Earnings Limit (£50,270/year). Earnings above that continue to attract the additional 2% rate, which was not changed.
Who benefits — and by how much?
The cut is worth 2p per pound on earnings between £12,570 and £50,270. For the three months from January to April 2024 (when the next scheduled change would take effect), taxpayers received a partial-year benefit before the full annual saving became visible. HMRC estimated the annual saving at an average of £450, but the actual figure scales directly with salary:
- £20,000 salary: saving of approximately £149/year
- £35,400 salary: saving of approximately £450/year
- £50,270 or above: saving capped at approximately £754/year
Workers earning below £12,570 pay no NICs and therefore see no benefit. Self-employed people on Class 4 NICs were not affected by this particular cut — their rate remained at 9% at this stage.
Why January rather than April?
The government chose to implement the cut mid-year specifically to get money into workers' pockets ahead of a general election expected in 2024. Delivering a tax cut in January rather than April means the benefit shows up in take-home pay three months earlier — a political calculation as much as a fiscal one. The mid-year timing did create administrative complexity for payroll providers, who had to update software and rerun calculations without the usual planning window afforded by an April start.
What it means in practice
For most employees, the change happened automatically through PAYE — no action was required. Your payslip from January 2024 onwards simply reflected a lower NICs deduction. If you noticed your take-home pay increase slightly in January without a pay rise, this is the reason.
It is worth noting that this cut does not affect employer NICs, which remained at 13.8% on earnings above £9,100. The reduction is entirely on the employee side. It also does not change Income Tax rates or thresholds, which remain frozen until at least 2028 under plans confirmed at the time.
To see exactly what your take-home pay looks like after the NI cut, calculate your take-home pay for your salary using our up-to-date calculator, which reflects all current rates including the January 2024 and April 2024 NI changes.
Conclusion
The January 2024 NI cut delivered a modest but real boost to most workers' monthly pay. At £37/month for a median earner, it is not transformative, but it was the first main-rate cut in over a decade. Chancellor Hunt subsequently announced a further cut to 8% from April 2024, meaning workers who stayed employed throughout 2024-25 received the full benefit of a 4-percentage-point reduction over the course of the year.
Use our calculator to see your exact take-home pay at current NI rates.