The Chancellor will increase the amount of National Insurance paid by UK employers in the Budget.
Rachel Reeves is also expected to lower the threshold for employers to start paying tax, but is unlikely to impose a tax on employer pension contributions.
It is understood the changes could raise £20 billion for public services such as the NHS.
The move is believed to be the biggest single tax increase in next week’s Budget, but other tax rises are expected.
National Insurance contributions are the UK’s second largest source of income, after income tax. It is paid by workers and self-employed persons based on earnings and profits, and by employers based on the wages they pay.
Speculation is growing that Labor will announce tax rises in its first budget in almost 15 years, with the chancellor claiming there is a £22bn “hole” in the public finances.
Last week, she hinted that businesses would face increases in National Insurance when she said Labour’s election pledge would not increase the contributions of “working people” linked to employees, rather than the amount paid by employers.
The BBC understands she is expected to confirm this when she delivers her budget on October 30.
Currently, employers pay 13.8% in National Insurance for workers earning more than £175 a week.
Any changes to taxes can be implemented quickly through digital payroll systems within weeks of the budget, meaning revenue can also be generated quickly.
For example, it is estimated that increasing the national insurance rate paid by employers by 1 percentage point to 14.8% could increase by up to £8.5 billion a year in the short term.
However, that estimate could change as Reeves is also expected to change the threshold at which businesses start paying the levy.
