2022 Dismissal Compensation Awards and Payroll Changes
Blog Posted: Tuesday 22nd March 2022 by
Dismissal Compensation Awards
On April 6th, the rates and restrictions for employment claims will rise (Dismissal Compensation Awards). The revised rates will apply if an employee’s effective date of termination of employment is on or after April 6, 2022. The rates are:
National Insurance Contributions
To pay for improvements to the care sector and NHS funding in England, a new health and social care tax of 1.25% will be implemented across the UK on April 6, 2022. Employers and workers who pay Class 1, Class 1A, and Class 1B National Insurance Contributions will be subject to the new health and social care levy.
National Minimum Wage
The National Minimum Wage and the National Living Wage are virtually identical. The National Living Wage applies to everyone aged 23 and up. Anyone under the age of 22 is covered under the National Minimum Wage.
National Living Wage
Based on this National Living Wage rise, you may want to reconsider some of your current salaries. An employee earning £20,000 per year and working 40 hours per week, for example, gets £9.62 per hour. The new National Living Wage is only 11p an hour higher. This may have an influence on recruitment and retention, therefore even if you don’t have any employees on minimum wage, you should assess your current rates, especially the lower ones, since they may be close to the new National Living Wage by April!
Statutory maternity pay, maternity allowance, statutory paternity pay, statutory shared parental pay, statutory adoption pay
Statutory Sick Pay
Actions to consider taking
Examine all of your worker’s wages because it could bring them close to the new National Minimum Wage or National Living Wage if not adjusted, which may have an impact on recruitment and retention.
Notify all employees about the National Insurance Contributions increase and the fact that there will be no change to their tax code this year before the change in April.
Need support dismissing an employee or drafting out contracts? Get in touch with Human Results for professional support at 01952 288361 or click here!