Our latest edition of Payroll Facts is now available for 2023/24 where you will find details of all the latest rates and allowances.

Tax

Tax rates

Tax rates (rUK and Wales)	2023/24 Taxable income	2022/23 Taxable income
20% basic rate	Up to £37,700	Up to £37,700
40% higher rate	£37,701 - £125,140	£37,701 - £150,000
45% additional rate	Over £125,140	Over £150,000

Scottish tax rates (SRIT)	2023/24 Taxable income	2022/23 Taxable income
19% starter rate	Up to £2,162	Up to £2,097
20% basic rate	£2,163 - £13,118	£2,098 - £12,726
21% intermediate rate	£13,119 - £31,092	£12,727 - £31,092
42% higher rate	£31,093 - £125,140	£31,093 - £150,000
47% top rate	Over £125,140	Over £150,000

Personal allowances

Personal allowances	2023/24	2022/23
Personal allowance*	£12,570	£12,570
Blind person’s allowance	£2,870	£2,600
Marriage allowance**	£1,260	£1,260
Married couple’s allowance for those born before 6 April 1935 Minimum Maximum	£4,010 £10,375	£3,530 £9,125

* Personal allowance is restricted by £1 for every £2 of income over £100,000, to a minimum of nil.
**Spouses or civil partners who are both basic rate taxpayers can elect to transfer 10% of their personal allowance between them.

Pension allowances

Pension allowances	2023/24	2022/23
Annual allowance	£60,000	£40,000
Lifetime allowance	N/A	£1,073,100

From April 2020, the annual allowance is reduced by £1 for every £2 of ‘adjusted income’ (which includes employer pension contributions) above £260,000 to a minimum of £10,000, but only if an individual also has ‘threshold income’ of over £200,000.

Student loan recovery threshold

An employee commences repayment of their student loan at 9% of their earnings which are subject to national insurance contributions (NICs) and exceed:

Plan 1 – Students who took out their loan before 1 September 2012		Plan 2 – Students who took out their loan on or after 1 September 2012
per annum	£22,015	per annum	£27,295
per month	£1,834	per month	£2,274
per week	£423	per week	£524

Plan 4 – Scottish students who were on Plan 1 will be moved to Plan 4
per annum	£27,660	Each pay period is treated in isolation; there are no carried forward debits or credits.
per month	£2,305
per week	£531

An employee commences repayment of their post graduate loan at 6% of their earnings which are subject to NICs and exceed:

Postgraduate loan
per annum	£21,000
per month	£1,750
per week	£403

National Insurance

National insurance contributions

Class 1 - Employers and Employees	Weekly	Fortnightly	Four weekly	Monthly	Annual
Lower earnings limit (LEL)	£123	£246	£492	£533	£6,396
Primary threshold (PT)	£242	£482	£964	£1,048	£12,570
VSecondary threshold (ST)	£175	£350	£700	£758	£9,100
Upper earnings limit (UEL)	£967	£1,934	£3,867	£4,189	£50,270
Upper secondary threshold (UST) under 21s	£967	£1,934	£3,867	£4,189	£50,270
Apprentice upper secondary threshold (AUST)	£967	£1,934	£3,868	£4,189	£50,270
Veterans upper secondary threshold (VUST)	£967	£1,934	£3,868	£4,189	£50,270
Freeport upper secondary threshold (FUST)	£481	£962	£1,924	£2,083	£25,000

Earnings over the LEL qualify an individual for certain state benefits and must be reported under PAYE, but no employer’s NICs are payable until earnings exceed the threshold of £175 per week and no employee’s NICs are payable until earnings exceed the threshold of £242 per week.

National insurance rates

National insurance rates		2023/24	Apr to Nov 2022/23
Class 1 – Employers	LEL - ST Rate above ST (no upper limit)	0% 13.8%	0% 15.05
Class 1 – Employees	LEL - PT Rate between primary threshold PT and UEL Rate above UEL Married women and widows rate above threshold, below UEL** Deferred rate	0% 12% 2% 5.85% 2%	0% 13.25% 3.25% 7.1% 3.25%
Class 1A**		13.8%	15.05
Class 1B (PAYE settlement agreement)		13.8%	15.05
Class 2 (Self-employed)	Small profits threshold (SPT) Flat rate per week (between SPT and LPL) Flat rate per week above LPL	£6,725 £0 £3.45	£6,725 £3.05 £3.15
Class 3 (Voluntary)	Flat rate per week	£17.45	£15.85
Class 4 (Self-employed)	Lower profits limit (LPL) Upper profits limit (UPL) Rate between limits Rate above upper limit	£9,880 £50,270 9% 2%	£9,880 £50,270 10.25% 3.25%
Employment allowance		£5,000	£4,000

* Only for women opting in before 1977.
** (Taxable benefits, termination payments over £30,000 and sporting testimonial payments over £100,000)

Statutory payments

Statutory payments

Statutory payments	2023/24	2022/23
Qualifying earnings level	£123	£123
Statutory sick pay (SSP)	£109.40	£99.35
Statutory maternity pay (SMP)*	£172.48	£156.66
Statutory paternity pay (SPP)**	£172.48	£156.66
Statutory adoption pay (SAP)*	£172.48	£156.66
Statutory shared parental pay (ShPP)***	£172.48	£156.66
Statutory parental bereavement pay (SPBP)**	£172.48	£156.66

* First six weeks at 90% of average weekly earnings (AWE) then 33 weeks at 90% of AWE or £172.48 whichever is lower.
** One or two weeks at 90% of AWE or £172.48 whichever is lower.
***Weekly rate at 90% of AWE or £172.48 whichever is lower for a maximum of 37 weeks

Recoverable amount from HMRC – SMP, SPP, SAP, ShPP and SPBP

92% if your total class 1 national insurance (both employee and employer contributions) is above £45,000 for the previous tax year, or 103% if your total class 1 national insurance for the previous tax year is £45,000 or lower.

Statutory redundancy

The maximum week’s pay that an employee can receive under the statutory scheme is:

	2023/24	2022/23
England, Wales and Scotland	£643	£571

Ages	Number of weeks’ pay
Each complete year of service between 18 and 21	_1/2
Each complete year of service between 22 and 40	1
Each complete year of service over 41	1 _^1/2

Service exceeding 20 years is not counted.
A week’s pay is the amount due under the employee’s employment contract on the date that the minimum notice of termination of employment was or should have been given.

Car and fuel rates

Company cars and mileage

The car benefit is calculated by multiplying the list price of the car when new (not the purchase price) by a percentage that is dependent on the level of approved CO2 emissions of the car.

Petrol/ Electric/ RDE2 Diesel		NEDC % of list price to be taxed	WLTP % of list price to be taxed	Diesel/ Non RDE2		NEDC % of list price to be taxed	WLTP % of list price to be taxed
CO2 emissions g/km	Electric range (miles)	NEDC % of list price to be taxed	WLTP % of list price to be taxed	CO2 emissions g/km	Electric range (miles)	NEDC % of list price to be taxed	WLTP % of list price to be taxed
0	N/A	2	2	0	N/A	N/A	N/A
1-50	>129	2	2	1-50	>129	N/A	N/A
1-50	70-129	5	5	1-50	70-129	N/A	N/A
1-50	40-69	8	8	1-50	40-69	N/A	N/A
1-50	30-39	12	12	1-50	30-39	N/A	N/A
1-50	<30	14	14	1-50	<30	N/A	N/A
51-54		15	15	51-54		19	19
55-59		16	16	55-59		20	20
60-64		17	17	60-64		21	21
65-69		18	18	65-69		22	22
70-74		19	19	70-74		23	23
75-79		20	20	75-79		24	24
80-84		21	21	80-84		25	25
85-89		22	22	85-89		26	26
90-94		23	23	90-94		27	27
95-99		24	24	95-99		28	28
100-104		25	25	100-104		29	29
105-109		26	26	105-109		30	30
110-114		27	27	110-114		31	31
115-119		28	28	115-119		32	32
120-124		29	29	120-124		33	33
125-129		30	30	125-129		34	34
130-134		31	31	130-134		35	35
135-139		32	32	135-139		36	36
140-144		33	33	140-144		37	37
145-149		34	34	145-149		37	37
150-154		35	35	150-154		37	37
155-159		36	36	155-159		37	37
160 -164		37	37	160 -164		37	37
165+		37	37	165+		37	37

This percentage is increased by 4% if the car is propelled solely by diesel (up to a maximum of 37%). Cars that meet the real driving emissions step 2 (RDE2) standard or diesel plug-in hybrids are exempt from the diesel supplement.

Fuel scale charges

	2023/24	2022/23
Car fuel benefit charge	£27,800	£25,300
Van fuel benefit charge	£757	£688

For 2023/24 the benefit is £27,800 multiplied by the relevant percentage as shown above (plus 4% diesel supplement where applicable but capped at 37%).

	2023/24	2022/23
Van benefit charge	£3,960	£3,600

HMRC's advisory fuel rates

From 1 December 2022	Petrol	LPG		Diesel	Fully Electric Cars
1400cc or less	14p	10p	1600cc or less	14p	8p Electricity is not a fuel for car fuel benefit
1401cc to 2000cc	17p	12p	1601cc to 2000cc	17p
Over 2000cc	26p	18p	Over 2000cc	22p

Hybrid cars are treated as either petrol or diesel cars for advisory fuel rates.

HMRC’s approved tax-free business mileage rates for employees using company cars are reviewed quarterly, with any changes taking effect from 1 March, 1 June, 1 September and 1 December. The rates are the maximum amount that can be paid without a charge to tax and NIC for business miles. If an employee receives less than these rates, then they can claim tax relief on the difference.

For further information and current rates employers are advised to check the following website: https://www.gov.uk/guidance/advisory-fuel-rates

Approved mileage rates

Approved mileage rates – for employees using their own vehicle
First 10,000 for tax purposes	45p
Over 10,000 for tax purposes	25p
For NIC purposes – regardless of mileage	45p
Bicycle rate – regardless of mileage	20p
Motorcycle rate – regardless of mileage	24p
Passenger rate – regardless of mileage	5p

Useful information

National minimum wage (NMW) and national living wage (NLW)

NMW	2023/24	2022/23
Under 18s	£5.28	£4.81
Workers between 18-20	£7.49	£6.83
Workers between 21-22	£10.18	£9.18
Workers 23 and over (national living wage rate)	£10.42	£9.50
Apprentice*	£5.28	£4.81

* Apprentices are entitled to apprentice rate if they are aged under 19 or are aged over 19 and in the first year of their apprenticeship.

If providing accommodation for employees then this can be taken into account when calculating the NMW.

Accommodation offset rates	2023/24	2022/23
Daily accommodation offset rate	£9.10	£8.70
Weekly accommodation offset rate	£63.70	£60.90

Tax codes

Code	What it means	Code	What it means
L	For an employee entitled to the standard tax-free personal allowance.	D1	All income is taxed at the highest rate of tax – currently 45%.
M	Marriage allowance: for employee whose spouse or civil partner has transferred some of their personal allowance.	NT	When no tax is to be taken from income or pension.
N	Marriage allowance: for employee who has transferred some of their personal allowance.	CBR	Welsh basic rate - 20%
OT	For an employee whose personal allowance has been used up, or new employee who hasn’t provided P45.	CD0	Welsh higher rate - 40%
S	Income or pension is taxed at the Scottish rate of income tax.	CD1	Welsh additional rate - 45%
C	Income or pension is taxed at the Welsh rate of income tax.	SBR	Scottish basic rate - 20%
T	When HMRC needs to review tax code.	SDO	Scottish intermediate rate - 21%
K	Total allowances are less than total ‘deductions’.	SD1	Scottish higher rate - 41%
BR	All income is taxed at the basic rate – currently 20%.	SD2	Scottish top rate - 46%
D0	All income is taxed at the higher rate of tax – currently 40%.

Childcare vouchers

Tax rate	Maximum voucher value per week	Maximum voucher value per month
Basic rate tax payer – 20%	£55	£243
Higher rate tax payer – 40%	£28	£124
Additional rate tax payer – 45%	£25	£110

The Government introduced the tax-free childcare scheme (TFC) in 2017.
For further information please go to - https://www.gov.uk/tax-free-childcare.
As a result, childcare vouchers schemes were closed to new entrants from 4 October 2018. Existing scheme members can continue to receive childcare vouchers if they remain eligible, do not leave the scheme and remain with their current employer.
Employees who joined a childcare voucher scheme on or before 5 April 2011 can receive vouchers worth up to £55 a week free of tax regardless of their tax rate.

Key payroll dates

Annual
1 April: National living wage and national minimum wage legislation becomes effective. The new rates will apply to the first pay reference period that begins on or after 1 April 2023.
6 April: Start of new tax year. New tax/NIC bands and thresholds are effective.
19 April: Deadline for final RTI submission of the year.
31 May: Issue of P60s to all eligible employees.
6 July: Return of forms P11D/P11D(b) to HM Revenue & Customs. Deadline for issuing form P11D to employees.
19 July (22 for electronic payments): Remittance deadline of Class 1A NICs (P11Ds).
19 October (22 for electronic payments): Remittance deadline of tax and Class 1B NICs (PSAs).

Monthly
On or before each pay date: Full payment summary (FPS) submission due to HMRC.
19th of each month (22nd for electronic payments): Remittance deadline of PAYE, NICs and CIS to HMRC.
19th of the following tax month: Employer payment summary (EPS) submission due to HMRC to apply a reduction for any statutory payments made or to advise of NIL PAYE liability.