The government announced in their Autumn statement that from April 2023 there will be some important changes that will affect wages and salaries.
Income Tax changes
The additional rate threshold for the 45% tax rate will move from £150,000 to £125,140. All other income tax thresholds will remain at the current rate until April 2028.
National Living Wage and National Minimum Wage
The National Living Wage will increase to £10.42 from the current £9.50 per hour from April 2023 for employees aged 23 and over.
The National Minimum Wage will also increase, as follows:
- 21-22 year olds – £10.19 an hour from £9.18
- 18-20 year olds – £7.49 an hour from £6.83
- 16-17 year olds and apprentices – £5.28 an hour from £4.81
The National Insurance contributions thresholds and class 1 rates will stay at the current rates until 2028.
Class 2 NIC rates for self-employed will be increased to £3.34 and class 3 to £17.45 from April 2023.
Employers National Insurance contributions secondary threshold will remain at the current rate of £9,100 a year until 2028. This will mean that employment costs will rise for eligible employers with employer NICs over £5000 a year, as salaries and wages increase between April 2023 and April 2028.
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