We manage payroll for many of our clients so keep up to date with any changes to the rates and thresholds for employers. Following the Autumn Budget 2021, there were some changes announced to National Insurance Contributions, National Living Wage and National Minimum Wage which we wanted to summarise for your information.
National Insurance Contributions
From April 2022 the rate of National Insurance contributions will change for one year. The amount will increase by 1.25% which will be spent on the NHS and social care across the UK.
This increase in National Insurance contributions will apply to:
Class 1 (paid by employees)
Class 4 (paid by self-employed)
secondary Class 1, 1A and 1B (paid by employers)
From April 2023 onwards, the NIC rates will decrease back to 2021/22 levels and will be replaced by a new 1.25% Health and Social Care Levy.
National Living Wage and National Minimum Wage
Following an independent Low Pay Commission review, the government accepted the recommendations to increase National Living Wage and National Minimum Wage from April 2022. The rates are shown in the table below.

Accommodation offset: Accommodation provided by an employer can be taken into account when calculating the National Living Wage or National Minimum Wage. To find out more click on this link – National Minimum Wage and Living Wage: accommodation.
It’s important that you factor in these increases to your financial forecasts from April 2022. If you would like any support with budgeting, then we can help you. In addition, if you are currently managing your own payroll then you may want to consider outsourcing next year. We not only manage your payroll ensuring that your employees are paid on time we also make sure that you are aware in advance of any changes which need to be made to ensure compliance with PAYE requirements.
You can call us on 0115 956 9452 or email info@marshallsmalley.com to find out more about our payroll services.