2022/2023 Payroll Rates and Thresholds
The following payroll rates and thresholds are applicable for the 2022-23 tax year. You should use these when processing and calculating your payroll and when providing your employees with any work benefits or expenses if doing this yourself. If using any payroll software, then you should ensure that it is updated to reflect any new rates.
Employee Personal Allowance: £12,570 per year (£242 per week, £1,048 per month)
Basic Tax Rate (20%) £12,570 – 37,700
Higher Tax Rate (40%) £37,701 – 150,000
Additional Tax Rate (45%) £150,001 and above
Scottish and Welsh tax allowances are available on request.
Emergency Tax Codes from 6th April 2022: 1257L week 1/month 1
As an employer it’s important to recognise that you can only make National Insurance (NICs) deductions on earnings above the Lower Earnings Limit:
Lower Earnings Limit £6,396 per year (£123 per week, £533 per month)
Primary Threshold £9,880 (£190 per week, £823 per month)
Secondary Threshold £9,100 (£175 per week, £758 per month)
Upper Earnings Limit £50,270 (£967 per week, £4,189 per month)
As an employer it’s important to recognise that you can only make National Insurance (NICs) deductions on earnings above the Lower Earnings Limit:
Lower Earnings Limit £6,396 per year (£123 per week, £533 per month)
Primary Threshold £12,570 (£242 per week, £1,048 per month)
Secondary Threshold £9,100 (£175 per week, £758 per month)
Upper Earnings Limit £50,270 (£967 per week, £4,189 per month)
The National Minimum Wage is the minimum pay per hour that you can pay your employees. The following rates apply from 1st April 2022.
23 + £9.50
21 – 22 £9.18
18 – 20 £6.83
Under 18 £4.81
Apprentices under 19 or in the first year £4.81
You will need to calculate your employee’s qualifying week, their average weekly earnings and leave period for maternity and paternity pay. You can use the government maternity/paternity pay calculator to work this out. Statutory payments are as follows:
SMP/SAP – weekly rate (first 6 weeks) 90% of employee’s average weekly earnings
SMP*/SPP/SAP*/ShPP – weekly rate
(*for remaining weeks following first 6 weeks) 90% of employee’s average weekly earnings or £156.66 (whichever is the lowest)
With SMP/SPP/ShPP and SAP you, as the employer, are able to claim back a proportion of your payments from HMRC. The rates are based on the sum total of your Class 1 National Insurance contributions from the previous tax year (both employer and employee combined contributions).
National Insurance in Previous Year Recovery Rate
£45,000+ 92%
Below £45,000 103%
SSP rates do not depend on the wage level of the employee, rather the number of Qualifying Days (QDs) that they work each week. The first 3 QDs of any sickness period (Period of Incapacity for Work – PIWs) are not counted and no SSP is paid. These are known as Waiting Days. They are not always the first 3 days of sickness absence as the employee may be absent on non QDs. If the gap between two or more PIWs is 8 weeks or less, then they should be counted as one PIW. If all 3 WDs haven’t been used in the first PIW, use any remaining WDs at the start of the next or series of linked PIWs. Entitlement to SSP is then decided by applying the qualifying conditions to the first day on the first PIW, not the start of any later linked PIW.
SSP entitlement depends on your employee’s AWE in a relevant period and AWE must include all earnings on which Class 1 National Insurance contributions (NICs) are due, or would be due if they were high enough. All earnings paid in that relevant period are divided by the number of days, weeks or months in that relevant period. For further information in this area visit the HMRC guidance page on SSP
| Unrounded daily rates | Number of QDs in week | 1 day to pay | 2 days to pay | 3 days to pay | 4 days to pay | 5 days to pay | 6 days to pay | 7 days to pay |
| £14.1929 | 7 | £14.20 | £28.39 | £42.58 | £58.78 | £70.97 | £85.16 | £99.35 |
| £16.5583 | 6 | £16.56 | £32.12 | £49.68 | £66.24 | £82.80 | £99.35 | |
| £19.87 | 5 | £19.87 | £39.74 | £59.61 | £79.48 | £99.35 | ||
| £24.8375 | 4 | £24.84 | £49.68 | £74.52 | £99.35 | |||
| £33.1167 | 3 | £33.12 | £66.24 | £99.35 | ||||
| £49.675 | 2 | £49.68 | £99.35 | |||||
| £99.35 | 1 | £96.35 |
If you are employing any graduates and their earnings are above the payroll rates and thresholds for recovery then you will need to record these deductions and calculate and deduct the repayments from their wage. The thresholds are based on two plans, depending on when and where the employee took out their loan, but a deduction rate of 9% applies in each case.
Graduate employee earnings threshold Plan 1
£20,195 per year
Graduate employee earnings threshold Plan 2
£27,295 per year
Graduate employee earnings threshold Plan 4
£25,375 per year
All information sourced from https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2022-to-2023
Information correct as at the time of writing, June 2022.
