HMRC has now confirmed the changes to Statutory Payment Rates for 2022-23. There are changes to multiple rates, so it’s a good idea to familiarise yourself with them now. We’ve put together this short guide so that you know what’s changing and what your responsibilities are as an employer and a payroll professional.
Remember that these rates of pay are calculated on average weekly earnings, which requires some calculation if you typically pay monthly or if you have employees on variable or zero-hour contracts. You should be prepped for all circumstances so that you know how to make statutory payments efficiently and accurately.
Here’s a summary of what’s changing for Statutory Payment Rates in 2022-23:
| Statutory Adoption Pay | 2021-22 | 2022-23 |
| Earnings threshold | £120.00 | £123.00 |
| Standard rate | £151.97 | £156.66 |
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| Statutory Maternity Pay | 2021-21 | 2022-23 |
| Earnings Threshold | £120.00 | £123.00 |
| Standard rate | £151.97 | £156.66 |
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| Statutory Paternity Pay | 2021-21 | 2022-23 |
| Earnings Threshold | £120.00 | £123.00 |
| Standard rate | £151.91 | £156.66 |
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| Statutory Shared Parental Pay | 2021-21 | 2022-23 |
| Earnings Threshold | £120.00 | £123.00 |
| Standard rate | £151.91 | £156.66 |
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| Statutory Sick Pay | 2021-21 | 2022-23 |
| Earnings Threshold | £120.00 | £123.00 |
| Standard rate | £96.35 | £99.35 |
The changes in payment rates are minor in real terms, but it’s essential to update your payroll services to avoid costly admin errors and even fines. If you’re unsure as to whether legislative changes are being applied correctly, perhaps a specialist outsourced payroll service is the right path for you.
Key things to be aware:
• The Lower Earnings Limit (LEL) for National Insurance contributions will increase from £120 to £123 per week. Some employees’ eligibility for statutory pay may be affected.
• The first six weeks of Statutory Maternity Pay and Statutory Adoption Pay will continue to equal 90% of an employee’s average weekly earnings.
• From week 7 onwards, Statutory Maternity Pay and Statutory Adoption Pay will be paid out at either 90% of average weekly earnings or at the Standard rate of £156.66, whichever is lower.
• Other Statutory Rates (Statutory Paternity Pay, Statutory Shared Parental Pay and Statutory Parental Bereavement Pay) will be paid out at either 90% of average weekly earnings or at the Standard rate of £156.66, whichever is lower, from week 1.
Your employer responsibilities
You must ensure that payment rate changes go into effect from 6 April 2022. You’ll want to update your payroll software ahead of time to avoid any headaches. It’s also a good idea to invest some time in training staff involved in payroll – legislative changes can happen annually and you should be confident that updates are being applied correctly.
To understand if employees are eligible for Statutory Pay and at what rate, you’ll need to calculate average weekly earnings. Employees with fluctuating earnings or variable contracts may be eligible for different rates of Statutory Pay throughout the financial year. It’s really important to have a strong payroll function, or to utilise the expertise of an external payroll bureau.
How to stay on top of payroll changes
Payroll is complicated but it doesn’t have to be a burden. If the number of employees in your business is growing, now might be the time to use an external payroll provider such as Qualitas.
Our payroll services are a low cost and effective way to manage your employee pay and benefits, while taking the pressure off internal teams. We can give you peace of mind and ensure that all legislative changes, as well as PAYE and NIC concerns, are taken care of.
For more information on how we could help you, get in touch today.