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
