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Annual update to Statutory Payments

View profile for Gillian Markland
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Annual update to Statutory Payments

With the start of a new tax year comes the annual increases to various statutory payments. Between 1 and 6 April 2022, a number of payment increases will come into force and we have highlighted some of the most important ones for employers to be aware of.

National Minimum Wage

From 1 April 2022, the national minimum wage rates will increase to the following:

  • £9.50 per hour for anyone aged 23 and over
  • £9.18 per hour for anyone aged 21-22
  • £6.83 per hour for anyone aged 18-20
  • £4.81 per hour for anyone under 18
  • £4.81 per hour for an apprentice

Employers have to legally be paying at least the minimum wage and could be reported to HMRC for paying below these rates. There are many sanctions for this, including being taken to civil court and fined a maximum of £20,000 per underpaid worker. Employers who fail to pay national minimum wage can be named publicly and their directors can be banned from being a company director for 15 years.

Statutory Sick Pay (SSP)

From 6 April 2022, the rate of statutory sick pay will increase to £99.35 per week.

This is only payable if an employee is paying Class 1 National Insurance contributions, is sick for four or more days and their average weekly earnings are not bellow the lower earnings limit. There are various rules in relation to payment of SSP and COVID-19, and government guidance is updated on this regularly.

Family Friendly Policies (including Statutory Maternity and Paternity Pay)

From 3 April 2022, the rate of the following family friendly policies all increase to £156.66 per week or 90% of the employee’s average weekly earnings, whichever is lower:

  • statutory maternity pay
  • maternity allowance
  • statutory paternity pay
  • statutory shared parental pay
  • statutory adoption pay

It is important that employees provide correct notice and proof of eligibility for these payments as there are various conditions that must be satisfied for such payments to be paid. These statutory payments are paid in the same way as wages (e.g. monthly or weekly) and will be subject to Tax and National Insurance deductions.

Statutory redundancy Pay cap

From 6 April 2022, statutory redundancy pay will be capped at £571 per week. This is a considerable increase from the 2021 cap of £544 and it reflects the rise in inflation.

It is important that all employers are aware of their statutory duties and all employees are aware of their rights to these payments. If you would like assistance ensuring your staff are being properly remunerated, talk to our team of specialist employment lawyers and we will be happy to help.

Our articles are intended for general information purposes only and are not a substitute for professional advice tailored to your specific circumstances. We are always very happy to discuss any plans, issues or concerns you may have and to clarify how we might be able to help. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.