National Insurance Increases

From 1st April 2022 the following rates will apply to National Insurance contributions. Please make sure that you’re ready for the changes!

Rates are increasing by 1.25% for employees and employers, as announced in the Autumn Budget 2021, to help fund the NHS, health and social care.

• Employers’ NIC: increasing to 15.05% (from 13.8%)
• Employees’ NIC:
  • increasing to 13.25% (from 12%) on monthly earnings between £797 and £4,189
  • increasing to 3.25% (from 2%) on monthly earnings above £4,189

• Self employed NIC: increasing to 10.25% (from 9%)
• Self Employed weekly NIC (the stamp) stays the same at £3.05 per week

From April 2023, National Insurance contributions will revert to the previous rates, and the new Health and Social Care Levy will be introduced as a separate deduction.

As part of this process, please remember to update your payroll software and warn your team of the change. As we’ve explained here, HMRC is asking employers to include the following message next to the deduction on payslips ‘1.25% uplift in NICs, funds NHS, health & social care’.

You’ll also need to adjust your payroll calculations for the increased National Minimum Wage and National Living Wage rates which take effect from 1st April 2022.

Please be sure to adjust your budgets and cash flow forecasts to take account of these increases. If you’d like some help to get budgets or cash flows set up, please get in touch!