Following the approval of the Budget at February's sitting of Tynwald, a series of changes to National Insurance contributions will come into effect from 6 April 2023.
The Primary Threshold at which Employees start paying National Insurance will rise by 5% in line with the average increase in earnings from £138 to £145 per week. In addition, the Secondary Threshold for employers will also increase to £145 per week.
There will be a similar adjustment in the Upper Earnings Limit, which is the point at which employees pay a lower rate of National Insurance from £823 to £864 per week.
These changes will ensure enough income is received by the National Insurance Fund to afford this year's significant increases in state pensions, other benefits and an allocation to the funding of the Manx NHS.
There will be no changes to Class 1 and 4 National Insurance rates for 2023-24.
Class 2 contributions will increase to £5.70 per week for self-employed and £7.00 per week for share-fisherman.
Class 3 contributions will increase to £17.45 per week.
Treasury Minister Dr Alex Allinson MHK said:
'During this year's Budget debate several Tynwald Members expressed concern about the long term future of the National Insurance Fund given the recent independent actuarial review which forecast that without action it might be exhausted by 2047-48 which is five years earlier than previously predicted.
'Treasury recognise that measures need to be implemented to ensure the long-term stability of our NI scheme so that not only can it fund our pension and benefit scheme but also support economic growth. I intend to come back to Tynwald later in the year with what action we are going to take to address the issues contained in the report.
'With that in mind it would not have been prudent to make significant changes to the thresholds at this time and while some might have wished for a bigger increase the change that has been approved will save employees up to £40.04 a year and employers up to £ 46.59 for each employee they have. The changes to the National Insurance thresholds will ensure that we have sufficient funds to support the pensioners of today, and those of the future.'