July 13, 2024

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Rates and thresholds for employers 2023 to 2024

Rates and thresholds for employers 2023 to 2024

Unless otherwise stated, the following figures apply from 6 April 2023 to 5 April 2024.

PAYE tax and Class 1 National Insurance contributions

You normally operate PAYE as part of your payroll so HMRC can collect Income Tax and National Insurance from your employees.

Your payroll software will work out how much tax and National Insurance to deduct from your employees’ pay. If you decide to run payroll yourself, you need to find payroll software to do this.

Tax thresholds, rates and codes

The amount of Income Tax you deduct from your employees depends on their tax code and how much of their taxable income is above their Personal Allowance.

England and Northern Ireland

The standard employee personal allowance for the 2023 to 2024 tax year is:

  • £242 per week
  • £1,048 per month
  • £12,570 per year
PAYE tax rate Rate of tax Annual earnings the rate applies to (above the PAYE threshold)
Basic tax rate 20% Up to £37,700
Higher tax rate 40% From £37,701 to £125,140
Additional tax rate 45% Above £125,140

Scotland

The standard employee personal allowance for the 2023 to 2024 tax year is:

  • £242 per week
  • £1,048 per month
  • £12,570 per year
PAYE tax rate Rate of tax Annual earnings the rate applies to (above the PAYE threshold)
Starter tax rate 19% Up to £2,162
Basic tax rate 20% From £2,163 to £13,118
Intermediate tax rate 21% From £13,119 to £31,092
Higher tax rate 42% From £31,093 to £125,140
Top tax rate 47% Above £125,140

Wales

The standard employee personal allowance for the 2023 to 2024 tax year is:

  • £242 per week
  • £1,048 per month
  • £12,570 per year
PAYE tax rate Rate of tax Annual earnings the rate applies to (above the PAYE threshold)
Basic tax rate 20% Up to £37,700
Higher tax rate 40% From £37,701 to £125,140
Additional tax rate 45% Above £125,140

Emergency tax codes

The emergency tax codes from 6 April 2023 are:

  • 1257L W1
  • 1257L M1
  • 1257L X

Find out more about emergency tax codes.

Class 1 National Insurance thresholds

You can only make National Insurance deductions on earnings above the lower earnings limit.

Class 1 National Insurance thresholds 2023 to 2024
Lower earnings limit £123 per week
£533 per month
£6,396 per year
Primary threshold £242 per week
£1,048 per month
£12,570 per year
Secondary threshold £175 per week
£758 per month
£9,100 per year
Freeport upper secondary threshold £481 per week
£2,083 per month
£25,000 per year
Upper secondary threshold (under 21) £967 per week
£4,189 per month
£50,270 per year
Apprentice upper secondary threshold (apprentice under 25) £967 per week
£4,189 per month
£50,270 per year
Veterans upper secondary threshold £967 per week
£4,189 per month
£50,270 per year
Upper earnings limit £967 per week
£4,189 per month
£50,270 per year

Class 1 National Insurance rates

Employee (primary) contribution rates

Deduct primary contributions (employee’s National Insurance) from your employees’ pay through PAYE.

National Insurance category letter Earnings at or above lower earnings limit up to and including primary threshold Earnings above primary threshold up to and including upper earnings limit Balance of earnings above upper earnings limit
A 0% 12% 2%
B 0% 5.85% 2%
C nil nil nil
F (Freeport) 0% 12% 2%
H (apprentice under 25) 0% 12% 2%
I (Freeport — married women and widows reduced rate) 0% 5.85% 2%
J 0% 2% 2%
L (Freeport — deferment) 0% 2% 2%
M (under 21) 0% 12% 2%
S (Freeport — state pensioner) nil nil nil
V (veteran) 0% 12% 2%
Z (under 21 — deferment) 0% 2% 2%

Employer (secondary) contribution rates

You pay secondary contributions (employer’s National Insurance) to HMRC as part of your PAYE bill. Find out more about running payroll and paying HMRC.

Pay employers’ PAYE tax and National Insurance.

National Insurance category letter Earnings at or above lower earnings limit up to and including secondary threshold Earnings above secondary threshold up to and including Freeport upper secondary threshold Earnings above Freeport upper secondary threshold up to and including upper earnings limit, upper secondary thresholds for under 21s, apprentices and veterans Balance of earnings above upper earnings limit, upper secondary thresholds for under 21s, apprentices and veterans
A 0% 13.8% 13.8% 13.8%
B 0% 13.8% 13.8% 13.8%
C 0% 13.8% 13.8% 13.8%
F (Freeport) 0% 0% 13.8% 13.8%
H (apprentice under 25) 0% 0% 0% 13.8%
I (Freeport — married women and widows reduced rate) 0% 0% 13.8% 13.8%
J 0% 13.8% 13.8% 13.8%
L (Freeport — deferment) 0% 0% 13.8% 13.8%
M (under 21) 0% 0% 0% 13.8%
S (Freeport — state pensioner) 0% 0% 13.8% 13.8%
V (veteran) 0% 0% 0% 13.8%
Z (under 21 — deferment) 0% 0% 0% 13.8%

Class 1A National Insurance: expenses and benefits

You must pay Class 1A National Insurance on work benefits you give to your employees, for example a company mobile phone. You report and pay Class 1A on expenses and benefits at the end of each tax year.

The National Insurance Class 1A rate on expenses and benefits for 2023 to 2024 is 13.8%.

Find out more about expenses and benefits for employers.

Class 1A National Insurance: termination awards and sporting testimonial payments

Class 1A National Insurance contributions are due on the amount of termination awards paid to employees which are over £30,000 and on the amount of sporting testimonial payments paid by independent committees which are over £100,000. You report and pay Class 1A on these types of payments during the tax year as part of your payroll.

The National Insurance Class 1A rate on termination awards and sporting testimonial payments for 2023 to 2024 is 13.8%.

Pay employers’ Class 1A National Insurance.

Class 1B National Insurance: PAYE Settlement Agreements (PSAs)

You pay Class 1B National Insurance if you have a PAYE Settlement Agreement. This allows you to make one annual payment to cover all the tax and National Insurance due on small or irregular taxable expenses or benefits for your employees.

The National Insurance Class 1B rate for 2023 to 2024 is 13.8%.

Pay Class 1B National Insurance.

National Minimum Wage

The National Minimum Wage is the minimum pay per hour almost all workers are entitled to by law. Find out more about who can get the minimum wage.

Use the National Minimum Wage calculator to check if you’re paying a worker the National Minimum Wage or if you owe them payments from past years.

These rates apply from 1 April 2023.

Category of worker Hourly rate
Aged 23 and above (national living wage rate) £10.42
Aged 21 to 22 inclusive £10.18
Aged 18 to 20 inclusive £7.49
Aged under 18 (but above compulsory school leaving age) £5.28
Apprentices aged under 19 £5.28
Apprentices aged 19 and over, but in the first year of their apprenticeship £5.28

Check National Minimum Wage rates for previous years.

Statutory Maternity, Paternity, Adoption, Shared Parental and Parental Bereavement Pay

Use the maternity, adoption and paternity calculator for employers to work out your employee’s:

  • Statutory Maternity Pay (SMP)
  • paternity or adoption pay
  • qualifying week
  • average weekly earnings
  • leave period

These rates apply from 2 April 2023.

Type of payment or recovery 2023 to 2024 rate
Statutory Maternity Pay — weekly rate for first 6 weeks 90% of the employee’s average weekly earnings
Statutory Maternity Pay — weekly rate for remaining weeks £172.48 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory Paternity Pay (SPP) — weekly rate £172.48 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory Adoption Pay (SAP) — weekly rate for first 6 weeks 90% of the employee’s average weekly earnings
Statutory Adoption Pay — weekly rate for remaining weeks £172.48 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory Shared Parental Pay (ShPP) — weekly rate £172.48 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory Parental Bereavement Pay (SPBP) — weekly rate £172.48 or 90% of the employee’s average weekly earnings, whichever is lower
SMP, SPP, ShPP, SAP or SPBP — proportion of your payments you can recover from HMRC 92% if your total Class 1 National Insurance (both employee and employer contributions) is above £45,000 for the previous tax year

103% if your total Class 1 National Insurance for the previous tax year is £45,000 or lower

Statutory Sick Pay (SSP)

The same weekly Statutory Sick Pay rate applies to all employees. However, the amount you must actually pay an employee for each day they’re off work due to illness (the daily rate) depends on the number of ‘qualifying days’ they work each week.

Use the Statutory Sick Pay calculator to work out your employee’s sick pay, or read how to work out your employee’s Statutory Sick Pay manually using these rates.

Unrounded daily rates Number of qualifying
days in week
£15.6285 7
£18.2333 6
£21.88 5
£27.35 4
£36.4666 3
£54.70 2
£109.40 1

7 qualifying days in a week

Use these rates to work out how much Statutory Sick Pay you need to pay an employee who works 7 qualifying days in a week.

Number of days to pay Amount to pay
1 £15.63
2 £31.26
3 £46.89
4 £62.52
5 £78.15
6 £93.78
7 £109.40

6 qualifying days in a week

Use these rates to work out how much Statutory Sick Pay you need to pay an employee who works 6 qualifying days in a week.

Number of days to pay Amount to pay
1 £18.24
2 £36.47
3 £54.70
4 £72.94
5 £91.17
6 £109.40

5 qualifying days in a week

Use these rates to work out how much Statutory Sick Pay you need to pay an employee who works 5 qualifying days in a week.

Number of days to pay Amount to pay
1 £21.88
2 £43.76
3 £65.64
4 £87.52
5 £109.40

4 qualifying days in a week

Use these rates to work out how much Statutory Sick Pay you need to pay an employee who works 4 qualifying days in a week.

Number of days to pay Amount to pay
1 £27.35
2 £54.70
3 £82.05
4 £109.40

3 qualifying days in a week

Use these rates to work out how much Statutory Sick Pay you need to pay an employee who works 3 qualifying days in a week.

Number of days to pay Amount to pay
1 £36.47
2 £72.94
3 £109.40

2 qualifying days in a week

Use these rates to work out how much Statutory Sick Pay you need to pay an employee who works 2 qualifying days in a week.

Number of days to pay Amount to pay
1 £54.70
2 £109.40

1 qualifying day in a week

Use these rates to work out how much Statutory Sick Pay you need to pay an employee who works 1 qualifying day in a week.

Number of days to pay Amount to pay
1 £109.40

Student loan and postgraduate loan recovery

If your employees’ earnings are above the earnings threshold, record their student loan and postgraduate loan deductions in your payroll software. It will automatically calculate and deduct repayments from their pay.

Rate or threshold 2023 to 2024 rate
Employee earnings threshold for student loan plan 1 £22,015 per year
£1,834.58 per month
£423.36 per week
Employee earnings threshold for student loan plan 2 £27,295 per year
£2,274.58 per month
£524.90 per week
Employee earnings threshold for student loan plan 4 £27,660 per year
£2,305 per month
£531.92 per week
Student loan deductions 9%
Employee earnings threshold for postgraduate loan £21,000 per year
£1,750 per month
£403.84 per week
Postgraduate loan deductions 6%

Company cars: advisory fuel rates

Use advisory fuel rates to work out mileage costs if you provide company cars to your employees.

These rates apply from 1 March 2023.

Engine size Petrol — amount per mile LPG — amount per mile
1400cc or less 13 pence 10 pence
1401cc to 2000cc 15 pence 11 pence
Over 2000cc 23 pence 17 pence
Engine size Diesel — amount per mile
1600cc or less 13 pence
1601cc to 2000cc 15 pence
Over 2000cc 20 pence

Hybrid cars are treated as either petrol or diesel cars for this purpose.

Check advisory fuel rates for previous periods.

Advisory electricity rate for fully electric cars from 1 March 2023

Amount per mile: 9 pence.

Electricity is not a fuel for car fuel benefit purposes.

Employee vehicles: mileage allowance payments

Mileage allowance payments are what you pay your employees for using their own vehicle for business journeys.

You can pay your employees an approved amount of mileage allowance payments each year without having to report them to HMRC. To work out the approved amount, multiply your employee’s business travel miles for the year by the rate per mile for their vehicle.

Find out more about reporting and paying mileage allowance payments.

Type of vehicle Rate per business mile 2023 to 2024
Car For tax purposes: 45 pence for the first 10,000 business miles in a tax year, then 25 pence for each subsequent mile

For National Insurance purposes: 45 pence for all business miles

Motorcycle 24 pence for both tax and National Insurance purposes and for all business miles
Cycle 20 pence for both tax and National Insurance purposes and for all business miles

Employment Allowance

Employment Allowance allows eligible employers to reduce their annual National Insurance liability by up to the annual allowance amount.

Allowance 2023 to 2024 rate
Employment Allowance £5,000

Apprenticeship Levy

Employers and connected companies with a total annual pay bill of more than £3 million, are liable to the Apprenticeship Levy, which is payable monthly. Employers who are not connected to another company or charity will have an annual allowance that reduces the amount of Apprenticeship Levy you have to pay. Apprenticeship Levy is charged at a percentage of your annual pay bill.

Allowance or charge 2023 to 2024 rate
Apprenticeship Levy allowance £15,000
Apprenticeship Levy charge 0.5%