Changes April 2023 including Minimum Wage, NI and Tax

Changes in April 2023 including Minimum Wage, NI and Tax

Are you prepared for the Payroll changes coming in April 2023?

Minimum Wage Increase - April 2023

The National Minimum wage will increase in April 2023. Employers should start paying the new rates on the first pay reference period on or after 1 April 2023.

The new rates from April 2023:

Age	Hourly Rate 2023/24	Hourly Rate 2022/23
23+	£10.42	£9.50
21 - 22	£10.18	£9.18
18 - 20	£7.49	£6.83
16 - 17	£5.28	£4.18
Apprentice	£5.28
Secondary Threshold NI (Director Minimum)	£758	£758

*please see Freeport/Apprentice rates here: https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2023-to-2024#class-1-national-insurance-rates

You must be school leaving age, see the government guide lines on school leaving age, to get the National Minimum wage and aged 23 or over to get the National Living Wage. The government website will help you work out minimum wages for different types of work if your employees are not paid by the hour.

There is also the Real Living Wage, and Living London wage, find out more here: https://www.livingwage.org.uk/what-real-living-wage

You can find the Statutory Pay rates here for Maternity, Paternity, Adoption, Shared Parental and Parental Bereavement pay here.

Final Pay Submission - FPS

Don’t forget to make sure your last RTI submission to HMRC is marked as the final one of the year so you can raise P60’s for employees where necessary.

Haines Watts offers payroll solutions tailored to your needs to ensure you pay your staff accurately and on time, every time. We can provide payroll support for 1 or 100 employees and help with workplace pension administration.

Give us a call now on 01379 640555 or email diss@hwca.com or visit our webpage here.

National Insurance

• Lower earnings Limit (LEL): £123 per week, £533 per month and £6,396 per year
• Primary Threshold (PT): £242 per week, £1,048 per month and £12,570 per year
• Secondary Threshold (ST): £175 per week, £758 per month and £9,100 per year
• Upper Earnings Limit (UEL): £967 per week, £4,189 per month and £50,270 per year

 

• Employee’s earnings above PT up to and including UEL: 12%
• Employee’s earnings above UEL: 2%
• Employer’s earnings above ST: 13.8%

You can find the full details here of the previous, current and new rates from 5^th April 2023.  

Employers’ Class 1 National Insurance contributions will be 13.8% per cent on all earnings above the secondary threshold, which for the 2023/24 tax year is £175 per week, £758 per month or £9,100 per year.

Tax

• UK basic tax rate: 20% on annual earnings above the PAYE tax threshold and up to £37,700
• UK higher tax rate: 40% on annual earnings from £37,701 to £125,140
• UK additional tax rate: 45% on earnings above £125,140

Taxpayers given more time for voluntary National Insurance contributions

The government has extended the voluntary National Insurance deadline to 31 July 2023. The original deadline was 5 April 2023. This means taxpayers have more time to decide whether to fill any gaps in their National Insurance record dating back to April 2006, to boost their new State Pension.

Student Loan

If your employees’ earnings are above the earnings threshold, record their student loan and postgraduate loan deductions in your payroll software. It will automatically calculate and deduct repayments from their pay.

You can find the loan earnings thresholds and rates here.

Employment Allowance

The Employment Allowance will remain at £5,000 – however remember that this is not available to companies with just one Director on the payroll, or to companies whose National Insurance Contributions exceeded £100,000 during the 2022/2023 tax year.

The Employment Allowance is a potential £5,000 reduction in Employers NI Liability. This could help you in deciding how much salary to pay yourself or your spouse in the next tax year.

Haines Watts Payroll

If you are struggling to keep up with the changes to PAYE, Employment Allowance and the National Insurance contributions please get in touch.

Payroll can be time consuming and mean taking time out from other business tasks. Let us help with your payroll function. We can offer a competitive, experienced and simple service whether you have 1 or 100 employees.

Using the latest software we offer an efficient and secure service, leaving you to focus on your business. Get in touch with us to find out how we can help, you can read more about our payroll service here: https://www.hwca.com/accountants-diss/outsourced-payroll/