With the new financial year fast approaching we all know this time of year brings lots of change for recruitment agencies and its clients.
This year is no different; in fact, the additional costs employers face to compliantly pay their temporary workers through a service provider or umbrella company will see the biggest increases for several years.
With this in mind, we thought that we would provide some additional information on the changes and breakdown some of the costs that we incur whilst making those payment on behalf of our agencies.
National Living Wage
This goes from £8.91 to £9.50 from 1 April 2022. This represents an increase of 59p or 6.6%. The Low Pay Commission’s recommendations set the Minimum Wage back on track to reach the Government’s target of two-thirds of median earnings by 2024. See the full breakdown of changes to National Wages below:
National Living Wage (22+) – Increasing from £8.91 to £9.50
National Minimum Wage (21-22) – Increasing from £8.36 to £9.18
National Minimum Wage (18-20) – Increasing from £6.56 to £6.83
National Minimum Wage (16-17) – Increasing from £4.62 to £4.81
Apprentice Rate – Increasing from £4.30 to £4.81
Accrual percentage goes from 12.07% (28 days) to 12.55% (29 days) in 2022, there will be an extra bank holiday on Friday 3 June to celebrate the Queen’s Diamond Jubilee. This will result in a four-day bank holiday weekend, as the regular May Bank Holiday Weekend date has moved to Thursday 2 June.
Employer’s National Insurance
From April 2022 the rate of National Insurance contributions you pay will change for one year. The amount employers contribute will increase by 1.25%, rising from 13.8% to 15.05%, these additional contributions will be spent on the NHS and social care across the UK.
Other statutory contributions
All other statutory contributions will remain the same:
Apprenticeship Levy – 0.5%
Employees’ pension contribution – 2%
Employers’ contribution – 3%
With these increases due to come into effect on 1 April 2022, we highlighted how these increases will affect the minimum rate that recruitment agencies will need to pay your temporary workers for them to remain compliant, through Exchequer Solutions.
If you’d like some further information on any of the above or you would like to discuss the rates in greater detail, then get in touch with a member of our team on 01244 500 190.