What is the new Health and Social Care levy?

From 6th April 2022 to 5th April 2023, the levy will come in the form of a 1.25% increase to both Employee’s and Employer’s National Insurance Contributions (NIC).

This means that employees will pay 13.25% Employee’s NIC on income above £9,880 per annum (£190 per week) and up to £50,270 per annum (£967 per week). Earnings above the £967 weekly threshold will have Employee’s NIC calculated at 3.25%.

Employer’s NIC will be 15.05% on taxable income above £9,100 (£175 per week).

Then from 6th April 2023 onwards, National Insurance rates will return to their current levels and the levy will become a new separate 1.25% tax for employers and a new separate 1.25% tax for employees. This means that unless the Government makes any further changes, the effect on your pay will remain unchanged from the previous tax year.