Current tax rates and thresholds for payroll
Why use an outsourced payroll service?
Current tax rates and thresholds across the UK
Here you can view all of the tax rates and thresholds for the current tax year. This includes the threshold for Tax and Employees’ NIC thresholds.
Standard Tax Code
No change to the standard Tax Code 1257L
Tax Thresholds – Employees
|
Threshold for Tax Weekly – £242 |
Employees NIC Thresholds Weekly – £242 |
Under 21 and Apprentices under 25 Weekly – £967 |
NIC Rates – Employees
| Weekly | Monthly | Yearly | |
|---|---|---|---|
| Percentage of NIC Employees | 8% up to £967 then 2% on additional pay | 8% up to £4,189 then 2% on additional pay | 8% up to £50,270 then 2% on additional pay |
Employer NIC Threshold
| Weekly | Monthly | Yearly | |
|---|---|---|---|
| Threshold for NIC Employers | £96 | £416.66 | £5000 |
Employer NIC Rate
Percentage of NIC Employers
15% on all earnings above Employers threshold
Employer Allowance
£10,500 per year.
Companies with only 1 director are not entitled but if they have 2 or more Directors or a Director and at least one employee paying NI they are entitled. Connected companies can only claim on one PAYE Scheme. You are also not entitled if you are a person employing a Personal Carer/Gardener/Nanny etc.
Statutory Sick Pay (SSP)
Lower earnings limit for calculation of SSP £125 per week average of last 8 weeks.
SSP amount £118.75 per week.
Statutory Maternity Pay (SMP) / Statutory Paternity Pay (SPP) / Statutory Adoption Pay (SAP) / Ordinary Statutory Paternity Pay (OSPP) And Additional Statutory Paternity Pay (ASPP)
Lower earnings limit is £125 per week average of the 8 week qualifying period.
Standard rate £187.18 per week.
NB: SMP 39 weeks – first 6 weeks at 90% or £187.18 whichever is the lower amount.
Reclaim 103% small employer (total NIC under £45,000 p.a.) & 92% large employer (total NIC £45,000+ p.a.).
New for 2024 employee can split the 2 weeks SPP and take 2 separate weeks within a year.
NEW STATUTORY NEONATAL CARE PAY
For parents whose babies are admitted to neonatal Care up to 28 days old and stay in hospital for more than 7 days. They can have up to up to 12 weeks leave on top of other leave and are entitled from day 1 of working for employer. The entitlement to pay is the same as SPP/SHPP if they have worked for at least 26 weeks and earn over £125 per week and paid at the standard rate of £187.18 or 90% of the average wage whichever is the lower amount.
Statutory Parental Bereavement Pay (SPBP) And Leave
2 weeks to be taken either together or separately within 56 weeks of the death of the child. Employees are entitled to the leave no matter how long they have worked for the employer but they are only entitled to the pay if they have worked for at least 26 weeks and earn over £125 per week. It is paid at the standard rate of £187.18 or 90% of the average wage, whichever is the lower amount.
Student Loan Deductions
Deduction rate is 9%
| Thresholds Plan 1 | Thresholds Plan 2 | Thresholds Plan 4 |
|---|---|---|
| £26,065 p.a. £2,172.08 p.m. £501.25 p.w. | £28,470 p.a. £2,372.50 p.m. £547.50 p.w. | £32,745 p.a. £2,728.75 p.m. £629.71 p.w. |
Post Graduate Loan
Deduction Rate is 6%
Threshold
£21,000 p.a.
£1750 p.m.
£403.84 p.w.
National Minimum Wage (NMW) and National Living Wage (NLW) (Since 1st April 2024)
| Age Group / Status | Hourly Rate |
|---|---|
| Aged 21 and over (NLW) | £12.21 |
| Aged 18 – 20 (NMW) | £10.00 |
| Aged 16 – 17 (NMW) | £7.55 |
| Apprentices under 19 years (NMW) | £7.55 |
| Apprentices over 19 but in 1st year (NMW) | £7.55 |
Income Tax Rates In England And Northern Ireland (Above The Threshold)
| Rate Band | Rate | Taxable Income Band |
|---|---|---|
| Basic Rate | 20% | £1 to £37,700 |
| Higher Rate | 40% | £37,701 to £125,140 |
| Additional Rate | 45% | £125,140+ |
Income Tax Rates in Scotland (Above the threshold)
| Starter Rate | 19% | £1 to £2,306 |
| Basic Rate | 20% | £2,307 to £14,921 |
| Intermediate Rate | 21% | £14,922 to £31,092 |
| Higher Rate | 42% | £31,093 to £62,430 |
| Advanced Rate | 45% | £62,431 to £125,140 |
| Additional Rate | 48% | £125,140+ |
Income Tax Rates in Wales (Above the threshold)
| Basic Rate | 20% | £1 to £37,700 |
| Higher Rate | 40% | £37,701 to £125,140 |
| Additional Rate | 45% | £125,140+ |
Auto Enrolment Earnings Thresholds
| 2024-2025 | Annual | Week | Fortnight | 4 Weeks | Month |
| Lower level of Qualifying Earnings | £6240 | £120 | £240 | £480 | £520 |
| Earnings Trigger for Auto Enrolment | £10,000 | £192 | £384 | £768 | £833 |
| Upper Level of Qualifying Earnings | £50,270 | £967 | £1,934 | £3,867 | £4,189 |
Auto Enrolment Minimum Contributions
| New Minimum Contributions | Employee 5% and Employer 3% = Total of 8% |
| Gross Pay Pension on Tier 1 | Employee 5% and Employer 4% = Total 9% |
| Gross Pay Pension on Tier 2 | Employee 5% and Employer 3% = Total 8% |
| Gross Pay Pension on Tier 3 | Employee 4% and Employer 3% = Total 7% |
Calculating Contributions Using Different Elements Of Staff Pay
If you calculate contributions using different elements of staff pay, you will need to use the tables below to work out which minimum contribution increases apply to you.
By law, a total minimum amount of contributions must be paid into the pension scheme. You, the employer, must make a minimum contribution towards this amount and your staff member must make up the difference. If you decide to cover the total minimum contribution required, your staff won’t need to pay anything.
There are three ways of working out the minimum contribution increases using different elements of staff pay. These are known as sets. The staff contribution rates may vary depending on the type of tax relief applied by your scheme. If you are unsure which set applies to your scheme check with your provider.
Set 1: contributions calculated on gross earnings
You calculate contributions based on gross earnings. You don’t include bonus, overtime, commission or certain staff allowances (such as shift pay or relocation allowance) in the calculation.
| Date Effective | Employer minimum contribution | Staff contribution | Total minimum contribution |
| New rate: 6 April 2019 onwards | 4% | 5% | 9% |
Set 2: contributions calculated on gross earnings based on 85% of total earnings
You calculate contributions based on gross earnings. You don’t include bonus, overtime, commission or certain staff allowances (such as shift pay or relocation allowance) in the calculation. You will have checked that the gross earnings for all staff in the scheme when added together were at least 85% of their total earnings.
| Date Effective | Employer minimum contribution | Staff contribution | Total minimum contribution |
| New rate: 6 April 2019 onwards | 3% | 5% | 8% |
Set 3: contributions calculated on all earnings
You calculate contributions based on all elements of staff pay and all earnings.
| Date Effective | Employer minimum contribution | Staff contribution | Total minimum contribution |
| New rate: 6 April 2019 onwards | 3% | 4% | 7% |
Pension schemes that don’t require an increase in minimum contributions
If you’re using a defined benefit scheme then the increases do not apply. Defined benefit schemes are mainly used by large employers and employers in the public sector and are sometimes known as ‘Final Salary Schemes’ or ‘Career Average Schemes’. If you are unsure if this applies to you, check your scheme documents or if you are still unsure speak to your scheme provider.
If you are using a hybrid scheme (a combination of defined benefit and minimum contributions), you will need to make increases to the minimum contributions section of the scheme.