Hopefully you already know this, but as of 6th July '22, the primary threshold for Employee's National Insurance is increasing 🔼
Employer’s National Insurance is unaffected by the change and will be calculated in the same way before and after 6th July '22.
Below are the current employee thresholds and those that are due to come into effect:
Current Thresholds (06.04.2022 - 05.07.2022):
| Weekly | Monthly |
Lower Earning Limit | £123 | £533 |
Primary Threshold | £190 | £823 |
Upper Earnings Limit | £967 | £4,189 |
Future Thresholds (06.07.2022 - 05.04.2023):
| Weekly | Monthly |
Lower Earning Limit | £123 | £533 |
Primary Threshold | £242 | £1,048 |
Upper Earnings Limit | £967 | £4,189 |
This is the only change to the legislation and the great news is you don't need to do anything as they will be automatically applied like magic ✨ (if the pay date is set at/after 06.07.2022).
Illustration Updates
As a result of the above changes, there will be an additional field for 'Pay Date' added when creating an illustration:
This is a mandatory field but it will pre-populate with the date on which you are creating the illustration 👏 However, if you know the date that the worker will be receiving their first pay (especially if this is after 06.07.2022), you can amend this date so that the correct thresholds are used 👍
Below is the difference you will see on the illustrative payslips with all details the same apart from the pay date:
Pay Date 24/06/2022:
Pay Date 06/07/2022:
Director's NI
Director’s NI is uniquely affected by the changes as Director’s NI is calculated on an annual basis. So that Directors are treated equally to Employees, the annual Director’s NI Threshold has been set at £11,908 for 22/23.
Payroll for Directors who have ‘Director’s NI' ticked will consider the Director’s NI Threshold of £11,908 NOT £12,570.