Governments Rates 21-22
Every person making contributions to the National Insurance needs to know that from April 2022, the amount of contribution will increase by 1.25% points. This amount will be spent on the NHS and social care across the UK.
The Government rates for the financial year 2021-2022 took effect on April 6, 2021. Below is the detailed explanation of the tax, thresholds, and National Insurance (NI) for the current year.
National Insurance deductions can be only made on earning above the lower earnings limit. To Income tax deduction of your employee will deepend on their tax code and how much their taxable income is above of their Personal Allowance.
Lower Earnings limitations (LEL) with a gross pay is £120 per week or less. If the employer decides to pay LEL for their employee, they cannot contribute to the NI. The employee becomes non-eligible for state pensions and benefits.
- Bracket between Lower Earning Limit and NI thresholds with £120 to £170 gross income per week. If the employer pays their employee within these ranges, there is no NI payable to HMRC.
- The employer’s secondary NI rate is £170 or above gross per week. If you pay your employees £170, they are on a usual NI code.
- The employee NI deducts, then the employer NI will indeed be payable.
- Employee’s primary NI rate with £184 or above gross per week. If the employer pays the employee £184 or more per week, must deduct National Insurance on their behalf and pay the NI by the employer.
These thresholds reflect on the rules and regulations of England alone. If you want to know about the threshold details of Scotland and Wales, visit here.
Tax & National Insurance Pay
- If the tax and NI pay of the employer are lesser than £1,500 per month, you must pay the tax and NI to HMRC quarterly.
- If the tax and NI payment exceed £1,500, the employer must pay the tax and NI to HMRC every month throughout the year.
- If the employer fails to pay the tax and National Insurance payment, there will be a penalty and interest.
TAX AND NI PAY DEADLINE | FINANCE | MONTHS TO BE COVERED |
19th January | Three | October to December |
19th April | Four | January to March |
19th July | One | April to June |
19th October | Two | July till September |
National Minimum Wage
The National Minimum Wage (22) is updated every October, whilst the National Living Wage (23+) renewal happens every April. The offset allowance for the nanny is £58.52 per week.
April 2021 (current rate)
AGE OF THE EMPLOYEE | GROSS PAY PER HOUR |
Below 18 | £4.62 |
18 to 22 | £6.56 |
21 to 22 | £8.36 |
23 and above | £8.91 |
April 2022
AGE OF THE EMPLOYEE | GROSS PAY PER HOUR |
Below 18 | £4.81 |
18 to 22 | £6.83 |
21 to 22 | £9.18 |
23 and above | £9.50 |
Pension Beneficiation
The pension contribution from April 6, 2021, to April 5, 2022, is as follows:
- The employer should provide 3% of pension contribution to their employee
- The employee should pay 4% of the pension contribution
- The UK Government provides the pension rate up to 1% to the employee
Statutory Sick Pay
Every employee has the right to the same amount of weekly Statutory Sick Pay. The amount the employer needs to pay the employee for each day they’re off work due to illness will depend on the number of “qualifying days” they work each week.
Statutory Maternity Pay
The statutory maternity pay for one to six weeks is an average of 90% of the gross payment per week. The remaining thirty-three weeks of the statutory maternity pay are £151.97 gross pay per week, 90% of the employee’s weekly lower pay.
How Little Ones Payroll can help you?
Let us handle the hard work of sorting your nanny’s payroll and tax admin
Our nanny payroll and nanny tax team is here to take care of the hard work with your nanny tax and payroll, to ensure all the t’s are crossed and i’s are dotted so you can focus on what’s important to you. Our payroll department is able to assist you and paying your nanny’s tax by:- Register you as employer
- Set up your PAYE scheme
- Provide provision of monthly/weekly payslips for your nanny
- Provide quarterly reminders of how much Income Tax and NIC is due for your nanny to HMRC and how to pay these
- Keep tax records on your nanny’s behalf
- Assist you with filing an employer’s annual tax return
- Keep complete Payroll records
- Provide you access to our HR
- Service
- Keep you up to date with tax rates and other changes that may affect your employment
- We will freeze your subscription if you stop your employment for a period of time
- We will help you with any issue that may arise regarding your employment such as sickness, maternity etc