Payroll Legislation

How Much is the New Health and Social Care Levy?

Legislation

How Much is the New Health and Social Care Levy?

Due Date

April 2022

Summary

On 7 September, Boris Johnson announced that a new health and social care tax will be introduced across the UK to pay for reforms to the care sector and NHS funding in England.

For the tax year 2022-23, national insurance contributions will increase by 1.25% for anyone earning more than £9,568 per annum.

For example, for someone who earns £20,000 per annum, their National Insurance Contribution (NIC) is currently is £104.36 per month. With the increased 1.25% from April 2022, their NIC will be £115.23 per month, and the monthly difference of £10.87 will result in a NIC increase of £130.44 per annum.

  • For earnings of £30,000K per annum, NIC increase will be £255
  • For earnings of £50,000K per annum, NIC increase will be £505
  • For earnings of £80,000K per annum, NIC increase will be £880
  • For earnings of £100,000K per annum, NIC increase will be £1130

From April 2023 National Insurance will return to its current rate. A new health and social care tax will be introduced that will apply to both employers and employees. On wage slips it will appear as a “Health and Social Care Levy”.

For example, for someone who earns £30,000K per annum, the employer’s NIC is currently is £243.29 per month. With the increased 1.25% from Apr 2022, the NIC will be £265.33 per month and the monthly difference of £22.04 will result in a NIC increase of £264.45 per annum.

Example for an annual salary of £30,000:

 2021-22 Monthly Contribution 2022-23 Monthly Contribution
NIC Employees at 12%£204.36NIC Employees at 13.5%£225.65
NIC Employers at 13.8%£243.29NIC Employers at 15.05%£265.33

NIC difference per month:

Employees = £21.29

Employers = £22.04

NIC difference per annum:

Employees = £255.45

Employers = £264.45

When taking the example of a medium sized company with 250 employees, with an average annual salary of £30,000., employers NIC alone would increase by £66,112.50 per annum.

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