Tax rates and thresholds
The rates and thresholds below, unless otherwise detailed, relate to the 2024/2025 tax year.
Employees National Insurance
Employee’s National Insurance is deducted from the employee’s gross salary.
In each employment the following thresholds apply. Unlike PAYE Tax you have a National Insurance allowance per employment and so these details relate only to your employee’s employment with you and are not affected by any other arrangements.
Date Range | Weekly Gross Pay | ||||
|---|---|---|---|---|---|
Up to £123 | £123.01 - £175.00 | £175.01 - £242.00 | £242.01 - £967.00 | £967.01 + | |
06/04/2023 - 05/01/2024 | 0% | 0% | 0% | 12% | 2% |
06/01/2024 - 31/03/2024 | 0% | 0% | 0% | 10% | 2% |
01/04/2024 onwards | 0% | 0% | 0% | 8% | 2% |
If your employee earns under £123 per week gross they will not be eligible for any statutory payments such as Statutory Sick Pay, Statutory Maternity Pay, Statutory Paternity Pay or Statutory Adoption Pay.
If your employee earns between £123 per week gross and £242 per week gross, they will not have to pay any NI contributions but will still be eligible for the statutory payments listed above.
Employers National Insurance
Employer’s National Insurance is paid in addition to the employee’s gross salary.
In each employment the following thresholds apply. Unlike PAYE Tax you have a National Insurance allowance per employment and so these details relate only to your employee’s employment with you and are not affected by any other arrangements.
Date Range | Weekly Gross Pay | ||||
|---|---|---|---|---|---|
Up to £123 | £123.01 - £175.00 | £175.01 - £242.00 | £242.01 - £967.00 | £967.01 + | |
06/04/2023 - 05/01/2024 | 0% | 0% | 13.8% | 13.8% | 13.8% |
06/01/2024 - 05/04/2024 | 0% | 0% | 13.8% | 13.8% | 13.8% |
06/04/2024 onwards | 0% | 0% | 13.8% | 13.8% | 13.8% |
If your employee is under 21 years of age, there will not be any Employer’s National Insurance charged until they earn over £967 per week gross.
Pay As You Earn Tax
The table below shows the standard tax rates and thresholds for the 2024/2025 tax year for employees living in England, Wales or Northern Ireland (slightly different rates apply in Scotland). The standard tax code for this year is 1257L, this represents £12,570 tax free per annum.
These percentages of tax due are based on the employee’s entire income, not just the income from one job.
Weekly Gross Earnings (Based on a 1257L tax code) | Percentage Tax Paid |
|---|---|
Up to £242 | 0% |
Between £242 and £966 | 20% |
Between £966 and £2884.61* | 40% |
Above £2884.61* | 45% |
* The personal allowance reduces where the individual’s income is above £100,000 per annum gross by £1 for every £2 above the limit.
Tax and NI Payments to HMRC
If your Tax and NI bill is below £1500 per month you only have to pay the Tax and NI to HMRC on a quarterly basis. Please be aware that late payments can result in hefty fines and interest being applied.
If your monthly liability bill exceeds £1500 per month you must pay HMRC every month. Please be aware that late payments can result in hefty fines and interest being applied.
HMRC Payment Deadlines
If you pay your quarterly tax bill by bank transfer, HMRC must receive cleared funds by the following deadlines.
Payroll Period | Bank Transfer due to be cleared by (always the same month as the end of the payroll period) |
|---|---|
6th April to 5th July | 22nd July |
6th July to 5th October | 22nd October |
6th October to 5th January | 22nd January |
6th January to 5th April | 22nd April |