October 20th 2022, Release Note: WFM UK | HR & Payroll: UK National Insurance and Non-UK National Minimum Wage Updates 2022 – Fourth & HotSchedules Customer Success Portal

Summary

Select the release feature from the table below to be taken directly to that section of the release note.

Feature 1

Feature 2

Following the government's 'mini budget' statement, UK National Insurance (NI) is being reduced. Rates have been updated and will take effect from 6th November 2022.

Non-UK National Minimum Wage Updates

In line with the Irish and Jersey government legislation, the National Minimum Wage rates have been updated and will take effect on 1st January 2023 and 1st November 2022 respectively.

Release date for all features: October 20th 2022

UK National Insurance Changes

Enabled by Default? - Yes
Set up by customer Admin? - No
Enable via Support ticket? - No
Affects configuration or data? - No

What's Changing?

UK National Insurance rates are being reduced by 1.25%, whilst Directors' National Insurance has been provided with an annualised rate.

Reason for the Change

Following the government's 'mini-budget' statement on 23rd September 2022, it was announced that National Insurance rates will be reduced back to the rates prior to the start of the 2022/2023 tax year, effective from (and including) 6th November 2022.

Customers Affected

All customers using the Payroll module.

Release Note Info/Steps

Payroll Statutory Information Page

Within the Payroll module, there is a Statutory Information page that contains the National Insurance rates, by each category letter for the current and previous tax years.

This page has been updated for the 2022/2023 tax year so that when the latest pay run with a pay date that is before 6th November 2022 is open, it will display the National Insurance rates effective between 6th April 2022 and 5th November 2022.

Then when the latest pay run with a pay date that is on or after 6th November 2022 is open, it will display the National Insurance rates effective between 6th November 2022 and 5th April 2023.

To view this page, go to Payroll > Administration > Payroll Statutory Information

Electronic Payslips message

The payslip message that states 'Update - There will be a 1.25% uplift in NICs which funds NHS, health & social care from 6th April 2022 to 5th April 2023' has been updated to state 'Update - There will be a 1.25% uplift in NICs which funds NHS, health & social care from 6th April 2022 to 5th November 2022'. This payslip message will only show on payslips with a pay date dated between (and including) 6th April 2022 and 5th November 2022.

Fig.1 - Email payslip showing updated payslip message with a pay date prior to 6th November 2022

Fig.2 - Email payslip showing no payslip message with a pay date after the 6th November 2022

As per the previous payslip message, this payslip message will be added to emailed payslips and the PDF version will be available to download within Employee Self-Service (ESS).

National Insurance Rates

National Insurance rates have been updated as follows:

Employer and Employee National Insurance (Class 1 NIC) - Effective from 6th November 2022 to 5th April 2023

	Employee Contributions				Employer Contributions
Table Letter	Earnings below LEL	Earnings above LEL up to PT	Earnings above PT up to UEL	Earnings above UEL	Earnings below LEL	Earnings above LEL up to ST	Earnings above ST up to FUST	Earnings above FUST up to UST / AUST / VUST	Earnings above UST / AUST / VUST
A	NIL	0%	12.00%	2.00%	NIL	0%	13.80%	13.80%	13.80%
B	NIL	0%	5.85%	2.00%	NIL	0%	13.80%	13.80%	13.80%
C(over state pension age)	NIL	NIL	NIL	NIL	NIL	0%	13.80%	13.80%	13.80%
F(Freeport Standard)	NIL	0%	12.00%	2.00%	NIL	0%	0%	13.80%	13.80%
H(Apprentice under 25)	NIL	0%	12.00%	2.00%	NIL	0%	0%	0%	13.80%
I(Freeport MWRRE)	NIL	0%	5.85%	2.00%	NIL	0%	0%	13.80%	13.80%
J(Deferment)	NIL	0%	2.00%	2.00%	NIL	0%	13.80%	13.80%	13.80%
L(Freeport deferment)	NIL	0%	2.00%	2.00%	NIL	0%	0%	13.80%	13.80%
M(Under 21)	NIL	0%	12.00%	2.00%	NIL	0%	0%	0%	13.80%
S(Freeport over pension age)	NIL	NIL	NIL	NIL	NIL	0%	0%	13.80%	13.80%
V(Veterans Standard)	NIL	0%	12.00%	2.00%	NIL	0%	0%	0%	13.80%
Z(Under 21 deferment)	NIL	0%	2.00%	2.00%	NIL	0%	0%	0%	13.80%

The rates effective from 6th April 2022 to 5th November 2022 can be found in the 2022/2023 Tax Year release note.

For termination awards, an annualised rate will not be used. Instead, the rate of Class 1A NICs is 15.05% if the payment of general earnings or amount (over the threshold of £30,000) is made before 6 November 2022, and the rate of Class 1A NICs is 13.80% if the payment of general earnings or amount (over the threshold over £30,000) is made on or after 6th November 2022.

For sporting testimonial payments, an annualised rate will not be used. Instead, the rate of Class 1A NICs is 15.05% if the payment of general earnings or amount (over the threshold of £100,000) is made before 6th November 2022, and the rate of Class 1A NICs is 13.80% if the payment of general earnings or amount (over the threshold over £100,000) is made on or after 6th November 2022.

Directors' National Insurance (Class 1 NIC) - Effective from 6th April 2022 to 5th April 2023

For those calculating Directors' National Insurance using the standard annual earnings period method, an 'annualised' rate has been applied:

	Employee Contributions				Employer Contributions
Table Letter	Earnings below LEL	Earnings above LEL up to PT	Earnings above PT up to UEL	Earnings above UEL	Earnings below LEL	Earnings above LEL up to ST	Earnings above ST up to FUST	Earnings above FUST up to UST / AUST / VUST	Earnings above UST / AUST / VUST
A	NIL	0%	12.73%	2.73%	NIL	0%	14.53%	14.53%	14.53%
B	NIL	0%	6.58%	2.73%%	NIL	0%	14.53%	14.53%	14.53%
C(over state pension age)	NIL	NIL	NIL	NIL	NIL	0%	14.53%	14.53%	14.53%
F(Freeport Standard)	NIL	0%	12.73%	2.73%	NIL	0%	0%	14.53%	14.53%
H(Apprentice under 25)	NIL	0%	12.73%	2.73%	NIL	0%	0%	0%	14.53%
I(Freeport MWRRE)	NIL	0%	6.58%	2.73%	NIL	0%	0%	14.53%	14.53%
J(Deferment)	NIL	0%	2.73%	2.73%	NIL	0%	14.53%	14.53%	14.53%
L(Freeport deferment)	NIL	0%	2.73%	2.73%	NIL	0%	0%	14.53%	14.53%
M(Under 21)	NIL	0%	12.73%	2.73%	NIL	0%	0%	0%	14.53%
S(Freeport over pension age)	NIL	NIL	NIL	NIL	NIL	0%	0%	14.53%	14.53%
V(Veterans Standard)	NIL	0%	12.73%	2.73%	NIL	0%	0%	0%	14.53%
Z(Under 21 deferment)	NIL	0%	2.73%	2.73%	NIL	0%	0%	0%	14.53%

For those calculating Directors' National Insurance using the alternative method, continue to calculate NIC using the regular employer and employee rates followed by a final annual calculation, ensuring any difference between the amount due and the amount paid to date is paid or refunded.

Please note: Changes to Class 1a and 1b National Insurance for expenses and benefits will be made in Q1 2023, ahead of P11d processing.

Additional Resources

Government Plan for Growth Article

2022/2023 Tax Year release note