National Insurance increase reversal - 6 November 2022

What is the National Insurance increase reversal?

On 6 April 2022, National Insurance Contributions (NICs) increased by 1.25%. The NICs increase was due to be replaced by the Health and Social Care Levy in April 2023.

The Chancellor of the Exchequer confirmed in September 2022 that the increase will be reversed from 6 November 2022. Additionally, the new Health and Social Care Levy will no longer be introduced in April 2023.

For more information, visit the GOV.UK website (opens in a new tab)

What do I need to do?

Due to the announcement, we released an automatic update of Sage Payroll, on 20 October 2022, to reflect this change.

You can process your pay runs as normal. The change takes effect from your first pay run dated on or after 6 November 2022.

There are 3 scenarios where you may need to take action:

Your last pay run was processed on or before 20 October, and your next pay run is on or after 6 November

In this scenario, you need to manually remove the default payslip message that was introduced when the 1.25% increase came into effect in April 2022.

If you need help with payslip messages, read our payslip messages article.

You have moved your pay date forward to 6 November

You may have moved your pay run to 6 November from an earlier date. For example, from 4 November to 6 November. In this scenario, you need to remove and re-enter the pay on your first pay run dated on or after 6 November. This is to ensure the pay run uses the new calculations.

You'll also need to remove the default payslip message that was introduced when the 1.25% increase came into effect in April 2022.

Note: If you have a custom payslip message that includes the 1.25% increase to NICs, you'll need to amend or remove this before you complete the pay run.

You have already completed your first pay run dated on or after 6 November

You may have already completed your first pay run dated on or after 6 November, prior to the update. In this scenario, you need to edit this completed pay run and remove and re-enter the pay. This is to ensure the pay run uses the new calculations.

This will generate a correction on your next pay run and on your next P32 report.

Note: If you have a custom payslip message that includes the 1.25% increase to NICs, you'll need to amend or remove this before you complete the pay run.

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