For the tax year 2022-23, HMRC has confirmed that the levy charge of 1.25% will be collected under the deduction of National Insurance Contributions (NIC).

This means that for employees whose earnings will be above the Primary Threshold (PT) up to the Upper Earnings Limit (UEL), NICs will be collected at a rate of 13.25%. The percentage applied above the UEL will also be increased to 3.25% (previously 2%).

For employers earnings above the secondary threshold, Class 1 NICs will increase to 15.05%. An increase of 1.25% will also be attributed to Class 1A and 1B NICs in addition.

Employers will need to include a generic message on payslips to show that the increase in NICs relates to the Health and Social Care Levy.

The self-employed will also see an increase in their Class 4 contributions, with the main rate increasing to 10.25% and higher to 3.25%.