Your National Insurance contributions might increase when the Health and Social Care Levy comes into effect in the UK (England, Scotland, Wales and Northern Ireland) on 6 April 2022.
The increase in your contributions will be used to help fund the NHS, health and social care.
You should read this guidance to prepare for the levy if you’re any of the following:
- an employer
- self-employed
- an employee
- self-employed or an employee and above State Pension age from April 2023
You will not be affected by these changes if you’re above State Pension age and are not an employee or self-employed. Find out more information in the ‘If you’re above the State Pension age’ section.
What the changes are and when they will affect you
For tax year 6 April 2022 to 5 April 2023
Employer Class 1, employee Class 1, Class 1A, Class 1B and Class 4 National Insurance contributions will increase, for one year, by 1.25%.
From 6 April 2023
The National Insurance contribution rates will go back down to 2021 to 2022 levels, and the levy will become a separate new tax of 1.25%.
How the levy will affect you
Between 6 April 2022 and 5 April 2023
If you are an employer, employee or self-employed (and below the State Pension age), you will pay the 1.25% increase in National Insurance contributions.
From 6 April 2023
The separate levy of 1.25% will apply to the same amounts for the following classes of National Insurance contributions:
- Class 1 that are above the primary and secondary thresholds
- Class 1A and Class 1B for employers
- Class 4 for the self-employed
All existing National Insurance contribution reliefs will apply to the separate levy for:
HMRC will collect the levy through existing PAYE payroll and Self Assessment systems.
If you’re an employer
If your business pays Class 1, Class 1A or Class 1B National Insurance contributions, you’ll need to start paying the 1.25% increase in contributions from 6 April 2022. You’ll then need to pay the separate 1.25% levy from 6 April 2023.
You may also have to pay the separate levy from 6 April 2023 for employees who are over State Pension age. Find out more information in the ‘If you’re above the State Pension age’ section.
Those liable to pay National Insurance contributions will also be liable to pay the levy. Existing employer reliefs and allowances that apply to National Insurance contributions will also apply to the levy.
Earnings on which National Insurance contributions are calculated will also be used to calculate the separate levy.
Information will be available later in 2022 on how to report the levy from April 2023.
If your employee falls into one of the following categories and earns less than £50,270 (or £25,000 for Freeport employees) per year, existing reliefs will apply for:
New information for payslips
HMRC is asking employers, where appropriate, to include the following message on payslips:
‘1.25% uplift in NICs, funds NHS, health & social care’.
This message is for the payslips of employees who have to pay the increased contribution between 6 April 2022 and 5 April 2023. This is so that they understand what it’s helping to fund.
From April 2023, you’ll need to report the levy as a new item through Real Time Information (RTI). You will need to show it on payslips as a separate 1.25% levy for employees who have to pay it.
If you’re self-employed
Check the table to find out if you’ll have to pay one or both of the following:
- the additional 1.25% National Insurance contribution for the tax year April 2022 to April 2023
- the separate 1.25% levy from 6 April 2023 onwards
| Self-employed type | Do I pay the additional 1.25% National Insurance contribution for tax year 6 April 2022 to 5 April 2023? | Do I pay the separate 1.25% levy from 6 April 2023? |
|---|---|---|
| I have profits more than the Lower Profits Limit for Class 4 National Insurance contributions | Yes | Yes |
| I pay Class 2 National Insurance contributions only | No — the levy does not apply to Class 2 National Insurance contributions | No — the levy does not apply to Class 2 National Insurance contributions |
| I’m above the State Pension age before 6 April 2022 with profits more than the Lower Profits Limit | No — because you do not pay National Insurance contributions | Yes — you must pay this using Self Assessment |
| I reach State Pension age in the tax year 6 April 2022 to 5 April 2023 with profits more than the Lower Profit Limit | Yes — because you’ll continue paying Class 4 contributions until the end of the tax year in which you reach State Pension age | Yes |
You’ll pay the Health and Social Care Levy as you would other taxes, using Self Assessment.
You should pay the first deduction of this tax year on your 2023 to 2024 tax return, in January 2025.
Check the rates and allowances for National Insurance contributions.
If you’re an employee
Check the table to find out if you’ll have to pay one or both of the following:
- the additional 1.25% National Insurance contribution for the tax year April 2022 to April 2023
- the separate 1.25% levy from 6 April 2023 onwards
| Employee type | Do I pay the additional 1.25% National Insurance contribution for tax year 6 April 2022 to 5 April 2023? | Do I pay the separate 1.25% levy from 6 April 2023? |
|---|---|---|
| I pay Class 1 National Insurance contributions above the primary threshold | Yes | Yes |
| I’m above the State Pension age and earn above the primary threshold | No — because you do not pay National Insurance contributions | Yes |
Check the rates and allowances for National Insurance contributions.
Your employer will deduct the levy from your earnings. They will pay this to HMRC on your behalf using the PAYE payroll system.
If you have to pay the additional 1.25% National Insurance contribution, check your payslips. HMRC are asking employers to include the following message: ‘1.25% uplift in NICs, funds NHS, health & social care’.
If you pay the separate 1.25% levy from April 2023, your employer should make sure it’s clearly shown on those payslips.
Find out more information from the Pensions Advisory Service.
If you’re above the State Pension age
Check the table to find out if you’ll have to pay one or both of the following:
- the additional 1.25% National Insurance contribution for the tax year April 2022 to April 2023
- the separate 1.25% levy from 6 April 2023 onwards
| Above State Pension age type | Do I pay the additional 1.25% National Insurance contribution for tax year 6 April 2022 to 5 April 2023? | Do I pay the separate 1.25% levy from 6 April 2023? |
|---|---|---|
| I’m an employee above the State Pension age earning less than the primary threshold | No — because you do not pay National Insurance contributions | No |
| I’m an employee above the State Pension age earning more than the primary threshold (Class 1) | No — because you do not pay National Insurance contributions | Yes — your employer will deduct the levy for you using PAYE payroll |
| I’m self-employed and I’m above the State Pension age before 6 April 2022 with profits more than the Lower Profits Limit | No — because you do not pay National Insurance contributions | Yes — you must pay this using Self Assessment |
| I’m self-employed and I reach State Pension age in the tax year 6 April 2022 to 5 April 2023 with profits more than the Lower Profit Limit | Yes — because you’ll continue paying Class 4 contributions until the end of the tax year in which you reach State Pension age | Yes |
Check the rates and allowances for National Insurance contributions.