2022 is a big year for the payroll world, with a lot of changes set to occur.

Whether your business manages its own payroll, or you outsource your payroll to an expert, it’s vital you are aware of the upcoming changes.

We know it can be hard to keep up with the many changes discussed and proposed, so below we have compiled everything you need to know in regard to all things payroll in 2022.

Changes to Payroll in 2022

Many changes have already been implemented so far this year, with most occurring at the beginning of April in line with the spring budget and new tax year.

Let’s explore.

National Minimum Wage Increase

As of April 1st, 2022, National Minimum Wage and Living Wage increased in line with inflation.

See the table below to see the increases for each category of workers.

Category of WorkerHourly Rate
Age 23 and over (Living Wage)£9.50
Ages 21-22£9.18
Ages 18 -20£6.83
Under 18£4.81
Apprentices under 19£4.81

Health and Social Care Levy

The Health and Social Care levy was announced in September of 2021 and was implemented on April 1st, 2022.

The levy is set at 1.25% and as of April was added to the rates of National Insurance Contributions. The increases apply to Class 1, 1A, 1B and Class 4 NI.

Though this levy has already been introduced, it is subject to change during the 2023/24 tax year. From 2023, the levy will separate from National Insurance into its own payment.

HMRC is yet to confirm how this will be structured, but time is ticking for further details to be announced so that payroll professionals will be able to get on top of any necessary software changes that may be involved.

Statutory Pay

Statutory rates of pay have changed as of April, with both family-related statutory pay and statutory sick respective pay rates both increasing.

Family-related statutory pay, which includes statutory maternity pay, maternity allowance, statutory paternity pay, statutory adoption pay and shared parental pay has increased as of April 3rd 2022 from £151.97 to £156.66

Also, Statutory sick pay (SSP) increased as of April 11th from £96.35 to £99.35.

PAYE Changes

Personal income tax allowances have been frozen until 2026 at £12,570. The chancellor announced this in his spring statement earlier this year, and also set the rate at which employees start paying income tax has been set to £12,570.

This is somewhat good news for payroll teams as it has granted a level of certainty, particularly amid the many other changes that are occurring in other areas of payroll.

Veteran’s National Insurance

Employers can now claim National Insurance Contributions relief on the earnings of veterans.

All veterans who have served at least one day in the armed forces qualify for this relief, which also includes personnel who completed at least one day of basic training.

The relief is available to employers of veterans regardless of when the veteran left the forces, however, the veteran must not have been previously employed in a civilian capacity.

The 12-month period of relief does not change if employment finishes with the initial employer who is claiming the relief, future employers can also claim this relief if they employ a veteran within the qualifying period.

Queen’s Platinum Jubilee 2022

Though heavily publicised, it is worth remembering that there is an extra bank holiday scheduled on Friday 3rd June 2022 in commemoration of the Queen’s Platinum Jubilee.

The bank holiday that usually takes place at the end of May has been moved from Monday 30th May to Thursday 2nd June to create a four-day weekend to allow these celebrations to take place.

Employment Bill

The long-awaited Employment Bill is expected to continue its progression throughout 2022. The Bill will help further enforce breaches concerning modern slavery, National Minimum Wage, Statutory Sick Pay, and holiday pay concerns.

A reading of this bill has already occurred, with a second reading being scheduled to take place on 6th May 2022.

Payroll professionals are eagerly anticipating this bill, with many hoping to see the implementation date for statutory neonatal pay and leave, and statutory carer’s leave, as well as the introduction of a single enforcement body to streamline the compliance relating to these employment concerns.

Payroll changes are always coming…

There are constant changes in the payroll world, which is why it can be so difficult to keep up with.

As experts, we know how hard it really is to stay up to date. Feel free to contact us with any of your payroll concerns and we will be happy to be of assistance. Get in touch at martyn@cheneypayrollservices.co.uk/