Health & Social Care Levy - National Insurance Increases

20 April 2022

April 2022 sees the introduction by the Government of the new ‘Health and Social Care Levy’ to fund investment in the NHS and social care.

This means that National Insurance contributions for working age employees, self-employed people and employers is increasing by 1.25% and is being added to the existing NHS allocation.

The NIC rate for most employees was 12% in 2021-22, and this is rising to 13.25% in 2022-23. The rate at which employers pay NIC is also rising from 13.8% in 2021-22 to 15.05% in 2022-23.

To ensure taxpayers understand that their increased contribution is helping fund public services, the Government are asking all employers to include a generic message for their employees on all payslips between 6 April 2022 and 5 April 2023 explaining what these funds will be used for. The standard message can read ‘1.25% uplift in NICs funds NHS, health & social care’. Please see example payslip below.

Employers can choose not to display this message on payslips if they wish, however they will still need to inform their Employees of the change via an alternative method, such as a letter or email etc.

From April 2023, the Health and Social Care Levy will be formally separated from National Insurance contributions and will also apply to the earnings of individuals working above State Pension age. National Insurance contribution rates will return to normal levels, and Health and Social Care Levy deductions will be shown as a completely separate item on the employee payslip. From April 2023, receipts from the Levy will go directly for spending on health and social care across all parts of the UK.

Should you wish to receive further clarification on the above or would like to speak to us about our payroll services then please get in contact via support@hr4uk.com or telephone 01455 444222.

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