National Insurance Contribution Increase and Payslips

The Government recently announced a 1.25% Health and Social Care Levy charge from April 2022. For the tax year 2022/2023 this will form part of the National Insurance Contributions for employees and employers, and from 2023/2024 a separate deduction for Health and Social Care levy will be introduced. To aid employees in understanding their payslips and, specifically, why their National Insurance Contributions have increased, HMRC has requested a message be placed on payslips wherever possible for the duration of the 2022/2023 tax year only. The messages are as follows:

• If your payroll software can put a message on a payslip template as standard - “1.25% uplift in NICs funds NHS, health & social care”.
• If your payroll software does not allow for a standard template, but you can add free text messages to payslips, then you can also use the above or “On 7 September 2021 the government announced a new 1.25% Health and Social Care Levy to fund investment in the NHS and social care. The Levy will be effectively introduced from April 2022 when National Insurance Contributions (NICs) for working age employees, self-employed people and employers will increase by 1.25% and be added to the existing NHS allocation. From April 2023, the Levy will be formally separated from NICs and also apply to the earnings of individuals working above State Pension age and National Insurance Contribution rates will return to 2021-22 levels.”

For Armstrong Watson payroll clients, we will advise the options available, after our payroll software confirms capability.

For further info on the change to National Insurance contributions please read our article here.