HR: managing the upcoming change to National Insurance

The 2021 Autumn Budget brought on a wide array of changes, but few will have as much of an impact on employees as the upcoming increase to National Insurance (NI).

With the increase due in April 2022, the duty falls on HR professionals to ensure employees are aware of the change and that they understand the implications.

How is National Insurance changing in April 2022?

To help fund investment in healthcare, Rishi Sunak announced a new UK-wide Health and Social Care Levy.

From April 2022, all working-age employees, self-employed and employers, will see their National Insurance increase by 1.25%

However, the increase to National Insurance is a temporary change for 2022/23, with the tax dropping back to the normal rate from April 2023.

What does the National Insurance change mean for HR?

Ultimately, this change means that employees will see a dip in their pay every month.

As the NI increase isn’t due until April 2022, HR professionals must provide their employees with a reminder leading up to the change; without an update, businesses run the risk of workers mistaking the dip in their pay as an error.

Additionally, with 40% of people living payday to payday in the UK, HR should consider offering additional support.

The support can range from offering a financial adviser to the payroll team drafting up an example payslip that showcases the monetary difference employees can expect.

How to communicate the National Insurance change?

Email is a very bloated communication method, with people receiving, on average, 121 emails each day.

But with many people still working from home, providing an in-person update on National Insurance is also impractical.

We’d advise utilising a cloud HR software that enables you to message employees directly; within the software, you can also request read receipts to ensure employees receive the message.

At IRIS, we have cloud HR software to meet the needs of any business – see the available solutions here.

For more information on what the Autumn Budget announced, read our blog here.