National Insurance increase and upcoming the National Minimum Wage increase - Are you ready?

2022 has already seen so many changes, with National Insurance contributions being no exception. As of the 6th April 2022, contributions have increased by 1.25%, meaning this extra tax can be spent on strained health and social care in the UK.

It has also been confirmed that the National Minimum Wage will benefit from a 6.6% increase as of April 2022.

As with any change to government funding, it is also beneficial as an employer and employee to make yourself familiar with any undertones. So how will this impact your employee's wage slips?

A considerable amount of different information will begin to circulate about these new wages and how they can affect you, your employees and your business, making it difficult to understand the implications and outcome.

With a salary increase comes the increase in tax, national insurance and other deductions, including pension and health care. So how can a business increase wages so that employees take home salary does not change, and is it even possible with the correct increase somewhere in the region of 3.5%?

Today, all businesses that employ staff have a workplace pension scheme. The employer sets up a pension with contributions taken directly from the employee's wage and paid into their pension. Most employers now tend to add money to your pension fund when you opt in.

Businesses can now diminish these National Insurance increases in a way that benefits not only the employer but also the employee. An employer sets up a salary sacrifice and must change the terms of an employee's contract; however, this cannot be done without the employee agreeing to the change. A salary sacrifice reduces an employee's entitlement to cash pay generally with the return of a non-cash benefit.

Most employees agree to a reduction of their gross earnings equivalent to the amount of their pension contributions with the employer then agreeing to increase their employer pension contributions. With so much information, it can be difficult to take it all in and understand all the terms, conditions, benefits and disadvantages.

Meet the Consultant: National Insurance increase (online) 

25 April 2022 between 10.00 - 13.00

From the comfort of your office, on Teams, at a pre-arranged 20 min 1-2-1 meeting.

Paul Andrews, the director of Corinthian Benefits, will host free one-to-one meetings on the 25th of April 2022 for BPF members.

These meetings aim to go through any myths and facts and provide helpful guidance on exactly what this all means and the implications for you and your business.

Book a 1-2-1 FREE 20min consultation to find out more about:

• How NI contributions can affect your business and provide the latest updates
• Everything you need to know about salary sacrifice and what your options are
• How to ensure your future is secure with employee and business protection
• How better employee packages can attract and preserve talent affordably