Several payments to employees are set to increase in early April 2022. These changes affect all employers. Does your business have employees? Here’s what you need to know:
5 Rate increases that affect all employers
1. National Minimum Wage and National Living Wage (NMW/NLW)
From 1 April 2022, the National Living Wage (for those aged 23 and over) and the National Minimum Wage (for those of at least school leaving age) will increase to:
- Employees aged 23 and over: £9.50
- Employees aged 21 – 22: £9.18
- Employees aged 18 – 20: £6.83
- Employees aged under 18: £4.81
- Apprentice rate: £4.81
All employers – regardless of size – must pay the correct minimum wage. It’s important to note that rates may change on employees’ birthdays or as apprentices progress to their second year.
Last December, over 200 employers were named and shamed by the government for failing to pay the minimum wage. These included household names as well as small businesses with just one employee affected.
If you are a payroll client of re:accounts, the new rates will be applied to the pay reference period immediately after 1 April 2022 in line with government requirements.
2. Statutory payment for families
Several family-friendly payments increase to £156.66 per week on 3 April 2022. These apply to employees away from work on paid family leave. The payments involved include:
- Shared parental
- Maternity
- Adoption
- Paternity
- Paternal bereavement
3. Statutory sick pay (SSP)
A higher daily SSP rate of £99.35 will apply from 6 April 2022
4. Lower earnings limit (LEL)
The first increase in two years will see the LEL threshold increase to £123 per week.
5. National Insurance (NI)
From 6 April 2022, there will be a temporary 1.25% increase in Class 1 NI both for employees and employers, as well as the same increase in relation to Class 4 NI which is paid by the self-employed. This increase should be explained on payslips as: 1.25% uplift in NICs funds NHS, health and social care. The higher rate of NI contributions is due to end on 5 April 2023.
“April is always a busy time for payroll,” explains Darby Nicholls from re:accounts in Stevenage. “The impact of the new rates depends upon who is employed by each business. However it’s important that employers know the bigger picture as circumstances and therefore the profile of their teams change.”
Is your business affected by these changes?
If you have queries about payroll payments, please let us know. We’re here to help.
