Payroll | CIS | Auto Enrolment

Health and Social Care Levy

April 5, 2022

From 6th April 2022 the rate of National Insurance contributions will rise by 1.25%, as part of the government’s plan to introduce a health and social care levy, where working people contribute to fund the NHS and the social care crisis. Individuals above State Pension age will not be affected by the temporary increase to National Insurance contributions for the 2022 to 2023 tax year but will be liable to pay the levy from April 2023.

This increase in National Insurance contributions will apply as follows: –

  • Employee’s will now pay 13.25% NI on all earnings above £190 for those employee’s paid weekly and £823 for those employee’s paid monthly
  • Employee’s will now pay 3.25% NI on all earnings above £967 for those employee’s paid weekly and £4,189 for those employee’s paid monthly
  • Employer’s will now pay 15.05% NI on all earnings above £175 for those employee’s paid weekly and £758 for those employee’s paid monthly
 

This will be taken along with the rest of the employee’s National Insurance payment in 2022-23, but from April 2023 the levy will officially be split out as a separate deduction. April 2023 will also be the point where the levy is paid by those who are above state pension age, but still in work.

The National Insurance lower earnings limits will increase to £190 for those employee’s paid weekly and £823 for those employee’s paid monthly. Upper earnings thresholds, however, are being frozen at £967 weekly and £4,189 monthly. This means that National Insurance contributions are being calculated on a lower amount of earnings that previously, offsetting some of the effects of the rate rises.

National Minimum Wage

Changes from April 2023 are as follows: –

Current Year

23 & over

21 to 22

18 to 20

Under 18

Apprentice

April 2023

£10.42

£10.18

£7.49

£5.28

£5.28

Previous Year

23 & Over

21 to 22

18 to 20

Under 18

Apprentice

April 2022

£9.50

£9.18

£6.83

£4.81

£4.81

Income Tax and National Insurance

Income Tax thresholds as indicated below:

Personal allowance: £12,570

Standard Tax code: 1257L

Income tax: £12,571 – £50,270 @ basic rate 20%

                  £50,271 – £125,140 @ higher rate 40%

                      Over £125,140 @ additional rate 45%

Student Loan thresholds: Plan Type 1 £1834 per month

                                       Plan Type 2 £2,274 per month

                                       Plan Type 4 £2,305 per month

                                       Postgraduate Loan £1,750 per month

National insurance primary threshold: increase from £823 to £1048 per month or £190 to £242 per week.

National insurance secondary threshold: Is £758 per month or £175 per week.

Statutory Payments

The earnings threshold for statutory payments increases from £120 per week to £123 per week

Statutory maternity pay/statutory adoption pay: weekly rate increase from £156.66 to £172.48; the first 6 weeks will remain at 90% of the employee’s average weekly earnings

Statutory paternity pay/shared parental pay: weekly rate increases to £172.48

SSP: weekly rate increases from £99.35 to £109.40

Auto Enrolment

The Automatic Enrolment earnings threshold will remain at £10,000. The lower earnings limit of the qualifying earnings band will remain at £6,240 and the upper earnings limit of the qualifying earnings band will remain at £50,270.

Minimum pension contributions remain at 3% employer and 5% employee

Employment Allowance

Only businesses with an employer national insurance bill of £100,000 or less in the previous tax year will be eligible to claim Employment Allowance.

For businesses who are eligible to claim it, the Employment Allowance is £5000 for the year.

Health and Social Care Levy