As the 2021/22 Tax Year comes to a close, as you may already be aware, we have seen a large minimum wage increase to boost low-paid workers income. This comes as a large cost to an employer, however a large gain to an employee.
Minimum Wage Rates
See below a breakdown of all the changes coming into effect from 6 April 2022;
National Insurance Increase
With the introduction of the Health and Social Care Levy from 6 April 2022, national insurance contributions have seen a 1.25% increase. The increase will apply to:
Class 1 (paid by employees)
Current rate for 2021/22 12% Main Rate / 2% Higher Rate
New Rates 2022/23 13.25% Main Rate / 3.25% Higher Rate
Employer Class 1
Current rate for 2021/22 13.8%
New Rates 2022/23 15.05%
Class 4 (paid by Self-Employed)
Current rate for 2021/22 9% Main Rate / 2% Higher Rate
New Rates 2022/23 10.25% Main Rate / 3.25% Higher Rate
Self-Employed individuals also pay Class 2 National insurance, which is set to be £3.15 per week from 6 April 2022. The small profits threshold for this is £6,725.
Dividend Tax Increase
Alongside the National Insurance rates increase, Dividend Tax rates have also increased by 1.25%, this comes into effect from 6 April 2022.
If you need any further information on any of the increases detailed above and how this will impact you, please get in touch with us today on 01724 848343.