NIC Increase 2022 & Health and Social Care Levy 2023

Published / Last Updated on 08/02/2022

From the 6 April 2022 a new Health and Social Care Levy of 1.25% of band earnings will be added to National Insurance Contributions (NIC) to pay for improvements to the NHS and Social Care system.

For tax year 6 April 2022 – National Insurance Temporary Increase for 1 Year by 1.25%

This will apply to:

  • Employer Class 1 on earnings between primary and secondary thresholds (band earnings)
  • Employer 1A and 1B on expenses and benefits in kind for employees
  • Employee Class 1 on primary and secondary thresholds (band earnings)
  • Self Employed Class 4 (profits)
  • Does not apply to those workers that have reached State Pension Age

NB Employer contributions are subject to the Employment Allowance subsidy where total employer NIC are below £4,000pa.

From 6 April 2023 – Health and Social Care Levy Replaces NIC Increase

NIC rates will revert back to 2021 levels and the levy will then become a separate new tax of 1.25%.

The 1.25% levy will apply to the same amounts for the following classes of National Insurance contributions:

  • Class 1 Employers and Employee on earnings between primary and secondary thresholds (band earnings)
  • Class 1A and Class 1B for employers on expenses and benefits in kind for employees
  • Class 4 for the self-employed
  • This will then also include workers that have reached State Pension Age

All existing National Insurance contribution reliefs will apply to the separate levy for:

  • Employees under the age of 21
  • Apprentices under the age of 25
  • Qualifying Freeport employees
  • Employers eligible for the Employment Allowance subsidy where total employer NIC are below £4,000pa
  • Armed forces veterans

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