NI tax rise hits workers harder than employers, says watchdog OBR

Published On Nov 5, 2024, 10:01 AM

The upcoming increase in National Insurance (NI) contributions for employers will primarily impact workers rather than employers, according to the Office for Budget Responsibility (OBR). The OBR predicts that about 75% of the financial burden will fall on employees, as employers may limit wage increases and hiring due to higher payroll costs. It suggests that lower-paid workers will be disproportionately affected. Although minimum wage increases may provide some compensation, the overall effect is seen as a tax on working individuals. This shift in NI contributions has sparked criticism from businesses and organizations, pointing to potential negative implications for services and overall economic growth.