The start of the new tax year is nearly upon us. Between 1st and 6th May, there will be a number of changes (and freezes) to statutory pay rates. As an employer, you need to not only know the rate increases, but also be ready to apply them.
In this post, we’re providing a summary of the main statutory pay rates for 2022 to 2023. These range from Statutory Maternity Pay to the redundancy rate cap and Statutory Sick Pay. We’ve also included a reminder about the National Living Wage (NLW) and National Minimum Wage (NMW) rates for the upcoming year. In addition, we’ve provided more information about which employees are entitled to the NLW and NMW here.
Statutory Sick Pay
Statutory Sick Pay will increase from £96.35 to £99.35 from 6th April.
Maternity, paternity and related rates
There is a single rate for Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay and Statutory Parental Bereavement Pay.
This will remain the same from 3rd April 2022. The rate will still be £156.66 per week or 90% of average earnings, whichever is the lower.
Redundancy pay cap
The redundancy pay cap will change from 6th April. If you make employees redundant and they have two years’ service or more, you must give them redundancy pay based on their weekly pay, length of service and age. For this calculation, weekly pay was capped at £544. This will rise to £571.
Lower earnings limit for National Insurance
The lower earnings limit will rise from £120 to £123 per week on 6th April 2022. This is the amount a person can earn per week before having to pay Class 1 National Insurance contributions.
Minimum & Living Wage, apprentices and accommodation offset
These new rates are best understood by consulting this table, which compares the April 2022 rate with the previous April 2021 rate. For those aged 23 and over the figure is for the National Living Wage. The National Minimum Wage is for younger employees who are over school leaving age.
|23 yrs +||21-22 yrs||18-20 yrs||Under 18 yrs||Apprentice|
A note about apprentices. They are entitled to the apprentice rate if they are aged under 19, or they’re aged over 19 and in the first year of their apprenticeship. If they are aged over 19 and have completed their first year, they should be paid the minimum rate for their age.
The ‘accommodation offset’ rates will also change in April 2022. If you provide accommodation for your employees, you can offset a certain amount against the National Minimum Wage or National Living Wage. The current and upcoming rates are below. The new rate also comes into force on 1st April.
|Daily offset rate||Weekly offset rate|
Advice on statutory pay rates 2022
If you need help applying the new rates, you may wish to consider our payroll outsourcing service. We can ensure that you pay the correct rates, remain compliant with the law and avoid penalties. To learn more, please get in touch or – if you are already a THP customer – talk to your account manager.
About Samantha Rowe
Sam’s title is Operations Manager, but the title itself doesn’t truly convey the variety of what she does for THP. From administrative tasks to payroll, strategic business planning, and office systems and procedures, Sam’s primary skill lies in multitasking.
Sam’s journey began as an office junior with George Nottage (now merged with THP), and she soon learned skills in payroll and bookkeeping, and then gained experience as a PA to the Directors, and as Administration Manager.
At the moment, Auto Enrolment is an area that has a key focus for Sam, and for THP as a whole. “The question I’m asked the most by clients just now is, ‘How will auto enrolment affect me?’ And the answer is, no matter how big or small you are, you will absolutely be affected by the Auto Enrolment regulations. I’d encourage you to start thinking about it now, and to look at your payroll software to make sure you’re ready.”