Health and Social Care Levy Calculator UK
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Reviewed by Calculator Editorial Team
The Health and Social Care Levy (HSCL) is a UK tax that funds the NHS and social care services. Employers must calculate and pay this levy based on their payroll costs. This calculator helps you determine your HSCL liability accurately.
What is the Health and Social Care Levy (HSCL)?
The Health and Social Care Levy (HSCL) is a tax introduced in April 2012 to fund the NHS and social care services in England. It was created to replace the Health Service Charge (HSC) and the Community Care Charge (CCC).
The levy is designed to be a more efficient way of funding health and social care services, with the money going directly to the NHS and social care providers rather than being collected by the government.
The HSCL is not the same as National Insurance contributions. While both are paid by employers, the HSCL funds health and social care services, while National Insurance funds the state pension and other benefits.
How is the HSCL calculated?
The HSCL is calculated as a percentage of an employer's payroll costs. The current rate is 12.8% of the total payroll costs for the tax year.
The calculation is straightforward:
Where "Total Payroll Costs" includes:
- Wages and salaries
- Statutory sick pay
- Statutory maternity pay
- Statutory paternity pay
- Statutory adoption pay
- Statutory shared parental pay
Note that the HSCL is not calculated on:
- Apprenticeship levy
- National Insurance contributions
- Pension contributions
- Other employer payments
Example Calculation
If your total payroll costs for the month are £50,000, your HSCL liability would be:
This means you would need to pay £6,400 in HSCL for that month.
Who pays the HSCL?
The HSCL is paid by employers on behalf of their employees. The levy is calculated based on the employer's total payroll costs, as described above.
Employers must register for the HSCL with HMRC and pay the levy electronically through their payroll system. The deadline for paying the HSCL is usually the same as the deadline for paying PAYE and National Insurance.
Micro businesses with a payroll of less than £3 million per year are exempt from the HSCL. However, they must still register for the levy if they have a payroll of more than £1 million.
HSCL vs National Insurance
While both the HSCL and National Insurance are paid by employers, they serve different purposes and are calculated differently.
| Feature | HSCL | National Insurance |
|---|---|---|
| Purpose | Funds NHS and social care services | Funds state pension and other benefits |
| Rate | 12.8% of payroll costs | Varies by earnings level |
| Who pays | Employers on behalf of employees | Employers on behalf of employees |
| Calculation basis | Total payroll costs | Employee earnings |
HSCL compliance requirements
To comply with HSCL regulations, employers must:
- Register for the HSCL with HMRC if their payroll exceeds £1 million
- Calculate the HSCL correctly based on their payroll costs
- Pay the HSCL electronically through their payroll system
- Keep records of HSCL payments for at least 6 years
- Report any changes in payroll costs to HMRC
Failure to comply with HSCL regulations can result in penalties and interest charges from HMRC.
Frequently Asked Questions
What is the current rate of the Health and Social Care Levy?
The current rate of the HSCL is 12.8% of an employer's total payroll costs.
Who is responsible for paying the HSCL?
Employers are responsible for paying the HSCL on behalf of their employees.
What is included in the calculation of the HSCL?
The HSCL is calculated on an employer's total payroll costs, which includes wages, salaries, and certain statutory payments.
Is the HSCL the same as National Insurance?
No, the HSCL and National Insurance serve different purposes. The HSCL funds health and social care services, while National Insurance funds the state pension and other benefits.
What are the penalties for not paying the HSCL?
Failure to comply with HSCL regulations can result in penalties and interest charges from HMRC.