The average Scottish worker is more than £500 per year worse off thanks to Labour’s National Insurance hike, according to new analysis of data.
Rachel Reeves’s ‘jobs tax’ rise, which took effect in April 2025, means employers will have to stump up an extra £879 for every employee earning the median Scottish salary.
The Office for Budget Responsibility calculated that up to 60% of the cost of this hike will be passed on by employers to workers through lower wages.
This equates to an annual salary hit of £527.43 for a typical worker, the Scottish Conservatives can reveal.
Shadow finance secretary Craig Hoy said the figures demonstrated the pain being inflicted on workers by the Chancellor, even before the £26 billion in tax hikes announced in her latest budget kicked in.
Scottish Conservative Shadow Cabinet Secretary for Finance and Local Government, Craig Hoy, said: “These figures highlight the devastating toll of Labour’s jobs tax on Scottish workers and businesses.
“Rachel Reeves’s punitive National Insurance raid has hammered take-home pay, led to job losses and stifled economic growth.
“This is just one of countless broken promises by Labour in the last 18 months which have sent household bills soaring. And there is more pain to come following the £26 billion tax raid in the most recent budget, in order to fund the Chancellor’s benefit splurge.
“These never-ending tax rises hit hardest in Scotland where, under the SNP, bills are the highest in the UK.
“Scottish workers and businesses can’t afford two left-wing, high-tax, low-growth governments.
“In contrast, the Scottish Conservatives are committed to growing our economy and bringing down the ballooning welfare budget, to fund essential services and reduce people’s bills.”
Notes to editors
The average worker in Scotland currently earns £2,600 a month according to HMRC. This data is taken from September 2025, halfway through the financial year. (Scotland’s Labour Market Insights, 29 October 2025, link).
This means that employers will have to pay an extra £879.05 in tax for the average workers thanks to Labour’s employers’ national insurance hike. Using the previous national insurance rates, a business employing a person earning £2,600 a month would have to pay tax worth £254.20 a month – or £3,050.35 per year. However, thanks to Labour’s jobs tax rise, this will instead increase to £327.45 a month and £3,929.40 per year. (Rates and allowances: National Insurance contributions, 6 April 2025, link).
Up to £527 of this cost will be passed on to workers through lower wages. The Office for Budget Responsibility estimated that up to 60% of the cost of higher taxes on employing people will be passed on to workers through lower wages in 2025-26. Taking 60% of the £879 in increased national insurance employers contributions means that approximately £527.43 in lower wages has been passed on to employees whose employers are having to pay this increased tax. (Economic and fiscal outlook October 2024, 30 October 2024, link).
Calculations:
HMRC estimate of median monthly pay in Scotland: £2,600.
Under old national insurance rates, employers paying someone £2,600 a month would start paying national insurance contributions after earning £758 at a rate of 13.8%. This means that they would pay approximately £254.20 a month or £3,050.35 a year. Using the new rates hiked by Labour, employers start paying 15% on earnings over £417 a month, meaning an employer paying a worker £2,600 would have to pay an extra £327.45 monthly or £3,929.40 a year. This is a difference of £879.05.