Last week Rishi Sunak delivered his Spring Statement announcing changes to be made which will affect your business if you employ staff. Here’s what you need to know about the changes to payroll from April 2022.

NHS National Insurance Levy

In order to invest further in the NHS and Health and Social Care sector following the impact of the Coronavirus pandemic the government has introduced the NHS National Insurance Levy. You will need to make sure that your employees are aware that their next payslip after 6th April will include a 1.25% deduction. This deduction needs to be shown on their payslip with the following message: ‘1.25% uplift in NIC’s funds NHS, Health & Social Care’. This new levy is to be applied from 6th April 2022 until 5th April 2023 and will be shown as a separate payment from the regular National Insurance Contribution. 

The following NIC’s will be affected:

• Class 1 - for primary and secondary thresholds
• Class 1A - for employers
• Class 1B - for employers
• Class 4 - for the self employed

Some people may be exempt from the levy which means you won’t need to contribute and deduct it from their salary if they earn less than £50,270 and the following applies;

• They are under 21
• They are an apprentice under 25
• They are a veteran of the armed forces
• They are employed in freeports

National Minimum/National Living Wage

If you currently pay any of your staff Minimum Wage or National Living wage then you need to be aware of the following changes which come into play from 1st April 2022.

• Apprentices

The current rate for an apprentice under the age of 19 or older than 19 and in their first year with you is £4.30 per hour which will be increasing to £4.81.

• Under 18

If you employ staff who are under 18 the minimum you should currently be paying them is £4.62 an hour and this will be increased to £4.81 from April.

• Ages 18-20

The current rate for employees falling into this bracket is £6.56 increasing to £6.83 from 1st April

• Ages 21-22

The minimum you should currently be paying anyone who is aged 21-22 is £8.36 per hour. This will change to £9.18 in April



• Ages 23 and over

For employees over the age of 23 you should be paying them at least £8.91 per hour and this will rise to £9.50 per hour from April.

National Insurance threshold

The government has announced that they will be aligning the threshold of NIC to be the same as income tax. This will have a positive effect on employers and employees who pay National Insurance because the threshold is now set at £12,570 giving employees the opportunity to earn more before you both have to contribute.

Employment allowance 

There’s good news for employers who receive Employment Allowance. Employment Allowance is currently set at £4,000 and from April this will be increasing to £5,000. This means that you can save a further £1,000 per tax year against your Class 1 NIC’s. 

The government has increased this threshold in order to help businesses to grow by boosting investment and innovation. 

You are eligible to claim employment allowance if you are a business, charity or community amateur sports club whose national insurance liabilities were less than £100,000 for the previous tax year.