From November 6, 2022, National Insurance contributions changes came into effect, lowering the main primary rate from 13.25% to 12% and the additional primary rate from 3.25% to 2%. As a result, the tax year 2022–2023 can be divided into three halves in terms of employee Class 1 National Insurance contributions, as shown in the table below.
Period | Primary threshold | Main rate | Additional rate |
6 April 2022 - 5 July 2022 | £190 weekly £823 monthly | 13.25% | 3.25% |
6 July 2022 - 5 November 2022 | £242 weekly £1,048 monthly | 13.25% | 3.25% |
6 November 2022 - 5 April 2023 | £242 weekly £1,048 monthly | 12% | 2% |
The difficult duty of managing in-year National Insurance adjustments falls to employer clients, hence it is crucial that their payroll software is kept current in order for National Insurance to be calculated using the rates in effect at the time that employee payments are issued.
This is especially critical in light of the upcoming rate changes on November 6, 2022 – failing to update payroll software by this date results in additional labour later in adjusting deductions. Employer clients using Basic PAYE Tools will be able to download an update starting on November 4, 2022, which will reflect the November rate changes.