Health & Social Care Levy

From April 2022, your take home pay will likely reduce because of a new tax called The Health and Social Care Levy. This is being done through an increase in National Insurance Contributions for the next tax year.

What this means is that if your salary stays the same from March to April 2022 that the amount of money you take home will reduce. Unfortunately there is nothing you can do to avoid this so it’s important to be prepared for this decrease in pay, especially when considering the increase in cost of living that’s also happening.

The National Insurance you pay is calculated in different bands, it’s not as simple as a certain percentage of your wages, with the rise of 1.25% applied to certain bands, so you won’t just see a deduction of 1.25%. This will also be a separate deduction from your wages from April 2023, so while that will mean the amount will stay the same it will be clearer as to what the deduction is for – people of state pension age will also only be affected by the increase from April 2023 rather than April 2022.

The quickest way to work this out is to look at your most recent payslip – if you see National Insurance deductions on it then you will probably be affected.

Those on a salary of £20,00 will pay an extra £89 per year, a £30,000 salary will mean you pay an extra £214 and a £50,000 salary will result in an increase of £464 per year.

No! Employed people pay Class 1 contributions, which are collected by your employer before you get paid so everything will be handled for you. Self employed pay Class 4 contributions, which will be automatically calculated when your self-assessment is completed for 2022/2023.

It would be understandable to be worried about an additional deduction from your wages when the cost of living is spiralling. The below links are for resources which might be able to help you with debt advice, answers to questions or to prepare a household budget.

www.moneyhelper.org.uk bring together three government backed financial guidance providers (the Money Advice Service, The Pension Advisory Service and Pension Wise) so are in a good place to help you find debt support and have a range of resources and tools available.

www.moneydashboard.com is a free budgeting app that uses Open Banking to allow you to see all your accounts in one place, making it easy to see how much money you’ve got and where it is.

Subscribe To Our Newsletter

We won't send you tonnes of emails but we will keep you updated of our latest news and some useful accounting & bookkeeping tips

Share This Post

More To Explore

Tax Budget 2024

PBATS Budget Analysis – March 2024

“As we predicted, for individual taxpayers, the budget was very encouraging.” National Insurance The further reductions in National Insurance following those already announced in the

SS Athletics young athlete
ESG

Our social commitment

PBATS are really excited to be supporting SS Athletics as our chosen community interest project for 2024.

Do you need practical bookkeeping & accounting services?

Drop us a line to see how easy accounting services can be

Contact practical bookkeepers and accountants in southend