The government announced some major changes to the National Minimum Wage and National Insurance Contributions that will impact on all taxpayers; businesses and individuals, including the self-employed, across the UK from April 2022.
Health and Social Care Levy – National Insurance Contributions (NICs) and dividend tax rates will increase by 1.25% from 6th April 2022, to raise an extra £12 billion a year, to spend on the NHS and social care in the UK.
A rate increase for the National Minimum Wage (NMW) comes into affect from 1st April 2022.
Here’s everything you need to know to minimise the impact on your business.
increase in the national insurance contributions
Employers are responsible for deducting income tax and National Insurance from employee’s wages depending on the government defined ‘classes’ depending on salary and type of employment (see table). Employers will need to start paying the 1.25% increase in contributions from 6 April 2022. This is the first phase of preparation for paying the new Health and Social Care Levy which will be seperated out from 6 April 2023.
Employers must ensure their payroll teams are aware of, and have implemented these changes correctly within their payroll system. This will avoid any back payments having to be calculated. The government are also advising that you keep your employees informed of these changes to minimise queries from their April wage slip. They have suggested adding the following message to employee payslips who have to pay the increased contribution from from April 2022 to April 2023 to help their employees understand what the increase is helping to fund:
1.25% uplift in NICs, funds NHS, Health & Social Care.
Employers’ National Insurance contribution will also be increasing by 1.5% from 6th April 2022.
From April 2023, employers will need to report the levy as a new item through your payroll. It will need to be shown separately on payslips for employees who have to pay it.
A RATE INCREASE FOR THE NATIONAL MINIMAL WAGE
The complexity of this increase means that there are several things an employer needs to consider:
- Firstly, they need to ensure their payroll system includes flags when an employee is approaching their 23rd birthday, so that they can check whether that employee’s pay needs to be adjusted to meet the new national minimum wage (NMW) requirements.
- Where an employer operates salary sacrifice schemes, such as for pension contributions, they must ensure their employees are not allowed to sacrifice their pay to below the NMW.
We’ve included a table of the increases coming into affect from 1st April 2022.
For many of our clients, they are managing one of their major costs, their wage bill, by monitoring staffing levels against productivity. Using skilled and experienced temporary workers to plug gaps.
Remember, we manage your temporary workers completely. From their identification checks and relevant licences through to their hours; weekly payroll; holiday requests and general enquiries.




