New for 2022-23

Print Friendly, PDF & Email


There are a number of changes to the rules and rates that will affect payroll for 2022-23 and this guide provides details of some of them. Payroll Manager is automatically updated to include each of these changes. We would recommend that you read the latest editions of HMRC Employer Bulletin (www.hmrc.gov.uk/payerti/forms-updates/employer-bulletin/index.htm ) which cover many of these items in greater detail. Please also see the GOV.UK document Rates and thresholds for employers 2022-23 which gives details of National Insurance rates and thresholds, minimum wage rates, etc.

  1. Employee Tax codes for 2022-23
  2. Income tax rates and thresholds in England, Northern Ireland, Wales and Scotland
  3. National Insurance bands and rates
  4. Auto Enrolment Pensions – Qualifying Earnings thresholds
  5. New rates of Statutory Pay
  6. National Minimum wage increases
  7. Student Loan rates and thresholds – Plan 1, Plan 2, Plan 4 (Scotland) and Postgraduate Loans
  8. Health and Social Care Levy
  9. Freeports
  10. New attachment of earnings types for Scotland and Wales
  11. Employment Allowance increase

1. Employee Tax codes for 2022-23

HMRC have announced that there will be NO uplifts of tax codes for tax year 2022-23. The ‘standard/emergency’ tax code for 2022-23 remains at 1257L. (S1257L in Scotland, C1257L in Wales).

The HMRC help sheet www.hmrc.gov.uk/helpsheets/p9x.pdf gives further guidance on Tax Codes.

2. Income tax rates and thresholds for 2022-23

The table below shows the income tax rates and thresholds in use for England, Wales and Northern Ireland (which are the same as those for 2021-22), and also those for Scotland, which uses a different system of rates.

Income tax rates for England, Wales & Northern Ireland (annual earnings)
Basic rate 20% On earnings £12,570 to £50,270
Higher rate 40% On earnings £50,271 to £150,000
Additional rate 45% On earnings above £150,000
(Rates assume a personal allowance of £12,570)
Income tax rates for Scotland (annual earnings)
Scottish Starter rate 19% On earnings £12,570 to £14,732
Scottish Basic rate 20% On earnings £14,733 to  £25,688
Scottish Intermediate rate 21% On earnings £25,689 to £43,662
Scottish Higher rate 41% On earnings £43,663 to £150,000
Scottish Top rate 46% On earnings above £150,000
(Rates assume a personal allowance of £12,570)

Payroll Manager will automatically apply the correct rate/ threshold for income tax according to the tax code assigned to each employee.

3. National Insurance Contributions

The table below shows the National Insurance bands for 2022-23. Note that the ‘Lower Earnings Limit’ for 2022-23 has been raised to £123 per week / £533 per month. The ‘Primary Threshold’ (the point at which employee National Insurance becomes due) is £190 per week / £823 per month from 6th April to 5th July, but then rises again to £242 per week / £1,048 per month from 6th July 2022.

Lower Earnings Limit (LEL) Primary Threshold (PT)  6 April- 5 July 2022  Primary Threshold (PT) 6 July – 5 April 2022 Secondary Threshold (ST) for Employer NIC Upper Earnings Limited (UEL)
Weekly 123 190 242 175 967
2-Weekly 246 380 484 350 1,934
4-Weekly 492 760 967 700 3,867
Monthly 533 823 1,048 758 4,189
Directors Annual 6,396 11,908 11,908 9,100 50,270

 

For directors using the Standard Annual Earnings Period method of calculating NIC, the Annual Primary Threshold is £11908, effective from 6 April 2022.

The rate at which NIC is to be paid by both the employee and by the employer has been increased by 1.25% in 2022-23. This is to fund the Governments new Health and Social Care levy (see section 8, below). A full list of NIC rates can be found at Rates and thresholds for employers 2022 to 2023 – GOV.UK (www.gov.uk)

Payroll Manager will automatically apply changes to the NIC bands and rates, including the rise in the Primary Threshold which happens on 6 July 2022.

4. Auto Enrolment Pensions – Qualifying Earnings thresholds

The 2022-23 Auto Enrolment Qualifying Earnings thresholds remain unchanged.

The Lower level of Qualifying Earnings remains at £120 per week / £520 per month for 2022-23

The Upper level of Qualifying Earnings remains at £967 per week / £4,189 per month for 2022-23

The ‘trigger point’ (where employees need to be automatically enrolled) remains at £10,000 per year.

The minimum contribution percentages relating to Automatic Enrolment pension schemes have not changed for 2022-23, and remain at 5% for the employee and 3% for the employer.

Payroll Manager will automatically apply these thresholds.

5. New rates of Statutory Pay

    • The rate for Statutory Sick Pay (SSP) is £99.35 per week from 6 April 2022 (the weekly rate was £96.35 in 2021-22).
    • The standard rate of Statutory Maternity, Paternity, Adoption Pay, Shared Parental Pay, and Parental Bereavement Pay (SMP, SPP, SAP, ShPP, SPBP) is £156.66 from April 2022 (the weekly rate was £151.97 in 2021-22).
    • The Lower Earnings Limit (LEL) for 2022-23 (i.e. the minimum amount an employee must earn in order to qualify for SSP, SMP etc) is £123.00 (the LEL was £120.00 in 2021-22)

See the HMRC publication Rates and Thresholds for 2022-23 for more information.

Payroll Manager will automatically apply the correct rate of statutory pay.

6. National Minimum Wage increases.

The National Minimum wage rates are increasing from April 2022. The new hourly rates, applicable from 1 April 2022 are as follows:

  • Aged 23 and above (national living wage rate) – £9.50
  • Aged 21 to 22 inclusive – £9.18
  • Aged 18 to 20 inclusive – £6.83
  • Aged under 18 (but above compulsory school leaving age) – £4.81
  • Apprentices aged under 19 – £4.81
  • Apprentices aged 19 and over, but within the first year of their apprenticeship – £4.81

Payroll Manager cannot automatically check that you are paying the minimum required amounts,  so if you have employees that are subject to these minimums you should ensure that the correct rate is being paid from April 2021 onwards. More information can be found on the link below:

National Minimum wage and Living wage rates

ACAS guide – when minimum wage increases apply

Payroll Manager – help with monitoring employees ages

7. Student loan rates and thresholds – Plan 1, Plan 2, Plan 4 (Scotland) and Postgraduate loans.

From 6 April 2022 the threshold at which borrowers repay Student Loan Plan Type 1 loans will increase from £19,895 to £20,195 per year – Type 1 loans are those issued to students before 2012. The rate remains at 9%.

The threshold for Student Loan Plan Type 2 loans (issued after 2012) remains at £27,295 per year. The rate remains at 9%.

The threshold for Student Loan Plan Type 4 loans (Scotland) increases from £25,000 to £25,375 per year. The rate remains at 9%.

The threshold for Postgraduate Loans (PGL), remains at £21,000 per year, and the rate remains at 6%.

Payroll Manager will automatically apply the correct student loan repayment threshold and will include the correct plan type in the RTI details sent to HMRC.

Please see our guide on Student Loan Deductions for details of how to process student loan repayments in the software.

For more information please refer to the HMRC guide on Repaying your student loan

8. Health and Social Care Levy

A new ‘Health and Social Care Levy’ to fund investment in the NHS and social care is to be introduced by the Government from April 2022 .

From April 2022, National Insurance contributions for working age employees, self-employed people and employers will increase by 1.25% and will be added to the existing NHS allocation. The NIC rate for most employees was 12% in 2021-22, and this will rise to 13.25% in 2022-23. The rate at which employers pay NIC will also rise from 13.8% in 2021-22 to 15.05% in 2022-23.

See our guide Health and Social Care Levy for more information.

9. Freeports

As part of the government’s work to ‘level up’ and boost economic activity, they aim to create a number of ‘Freeports’ to generate employment opportunities in some of the most deprived communities across the UK. One of the benefits to employers that operate within a Freeport location will be a reduction in the amount of employer NIC payable with respect to new employees that they take on from 6 April 2022. A new ‘Freeport Upper Secondary Threshold (FUST)’ is being introduced, set at £25,000, below which a zero-rate of employer NIC will be applied.

The ‘Links‘ section at the bottom of this guide gives more details on where these Freeports are located and how the scheme will be operated. If you are operating within a Freeport location and are taking on a new qualifying employee then please see our guide Freeports Employer NIC relief

10. New attachment of earnings types for Scotland and Wales

The Scottish Parliament has approved changes to its ‘Arrestment Orders’ from April 2022, and the Welsh Government have introduced tables for their ‘Attachment of Earnings Orders’ from April 2022. Both of these changes have been added to Payroll Manager, and are available for selection as attachment ‘types’ should you receive an instruction to apply them for an employee (by clicking on the ‘Attachments‘ tab on the ‘Pay Details’ screen).

scotland and wales

11. Employment Allowance Increase

The Employment Allowance is rising from £4000 in 2021-22 to £5000 in 2022-23. Payroll Manager will apply this change automatically.

GOV.UK –  Rates and Thresholds for 2022-23

Freeports – GOV.UK (www.gov.uk)

Health and Social Care Levy – GOV.UK (www.gov.uk)

Was this article helpful?

Related Articles