One of the biggest changes we will see in payroll for 2022/23 are the National Minimum Wage (NMW) increases. Chancellor Rishi Sunak said that the increase, “ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this parliament.” While the increase has been welcomed by workers, the rise in wages could place a strain on small-to-medium sized business, who will also be impacted by the increase in National Insurance contributions.
Don’t get caught out by National Minimum Wage changes
NMW is an area where businesses inadvertently get caught out. Extreme caution is recommended, particularly before you consider deducting anything from the employees pay before they receive it, for example under salary sacrifice, or for charges to the employee or even for savings schemes such as a Christmas Club. Any queries can be dealt with by the payroll team along with our employment tax solutions team.
National Insurance Contributions (NICs) paid by both employed and self-employed workers will rise by 1.25% from April 2022 with the intention of helping to fund the health and social care sector.
The NMW increases are due by the 1st April 2022 and the payroll team here at Menzies can assist in checking you are meeting the minimum wage requirements.
| Age | 23 + | 21 – 22 | 18 -20 | 16 – 17 | Apprentice Rate |
| Hourly Rate | £9.50 | £9.18 | £6.83 | £4.81 | £4.81 |
- The next significant change is National Insurance for 2022/23 will increase by an additional 1.25%
- Employees will pay NI after the annual threshold of £9,880 at 13.25%
- Employers will pay NI after the annual threshold of £8,840 at 15.05%
- For Tax Codes this tax year the personal tax-free allowance is frozen at £12,570 the first time since 2010 that the personal tax-free allowance has not increased.
- The higher rate threshold is also frozen and remains at £50,270 for 2022/23
- Employment Allowance remains at £4,000. Eligibility criteria remains the same as 2021/22.