18/19 Payroll Rates & Thresholds

2018/2019 Payroll Rates and Thresholds

payroll rates and thresholds

The following payroll rates and thresholds are applicable for the 2018-19 tax year.  You should use these when processing and calculating your payroll and when providing your employees with any work benefits or expenses if doing this yourself.  If using any payroll software, then you should ensure that it is updated to reflect any new rates.

Income Tax Thresholds and Tax Codes

Employee Personal Allowance: £11,850 per year (£228 per week, £988 per month)

Income Tax Rate Thresholds (UK)*England only

Basic Tax Rate (20%)                  £11,850 – 34,500

Higher Tax Rate (40%)                £34,501 – 150,000

Additional Tax Rate (45%)         £150,001 and above

Emergency Tax Codes from 6th April 2018: 1185L W1, 1185L M1, 1185L X

Class 1 National Insurance Thresholds & Rates

As an employer it’s important to recognise that you can only make National Insurance (NICs) deductions on earnings above the Lower Earnings Limit:

Lower Earnings Limit                                                                £6,032 per year (£116 per week, £503 per month)

Primary/ Secondary Threshold                                               £8,424 (£162 per week, £702 per month)

 

Upper Earnings Limit                                                               £46,350 (£892 per week, £3,863 per month)

National Minimum Wage Thresholds

The National Minimum Wage is the minimum pay per hour that you can pay your employees. The following rates apply from 1st April 2018

25 +                                                                             £7.83

21 – 24                                                                        £7.38

18 – 20                                                                        £5.90

Under 18                                                                    £4.20

Apprentices under 19 or in the first year            £3.70

Statutory Maternity, Paternity, Adoption and Shared Parental Pay Thresholds

You will need to calculate your employee’s qualifying week, their average weekly earnings and leave period for maternity and paternity pay. You can use the government maternity/paternity pay calculator to work this out.  Statutory payments are as follows:

SMP/SAP – weekly rate (first 6 weeks)                  90% of employee’s average weekly earnings

SMP*/SPP/SAP*/ShPP – weekly rate
(*for remaining weeks following first 6 weeks)     90% of employee’s average weekly earnings or £145.18 (whichever is the lowest)

With SMP/SPP/ShPP and SAP you, as the employer, are able to claim back a proportion of your payments from HMRC.  The rates are based on the sum total of your Class 1 National Insurance contributions from the previous tax year (both employer and employee combined contributions).

National Insurance in Previous Year             Recovery Rate

£45,000+                                                                         92%

Below £45,000                                                               103%

Statutory Sick Pay (SSP) Thresholds

SSP rates do not depend on the wage level of the employee, rather the number of Qualifying Days (QDs) that they work each week.  The first 3 QDs of any sickness period (Period of Incapacity for Work – PIWs) are not counted and no SSP is paid.  These are known as Waiting  Days.  They are not always the first 3 days of sickness absence as the employee may be absent on non QDs.  If the gap between two or more PIWs is 8 weeks or less, then they should be counted as one PIW.  If all 3 WDs haven’t been used in the first PIW, use any remaining WDs at the start of the next or series of linked PIWs.  Entitlement to SSP is then decided by applying the qualifying conditions to the first day on the first PIW, not the start of any later linked PIW.

SSP entitlement depends on your employee’s AWE in a relevant period and AWE must include all earnings on which Class 1 National Insurance contributions (NICs) are due, or would be due if they were high enough.  All earnings paid in that relevant period are divided by the number of days, weeks or months in that relevant period.  For further information in this area visit the HMRC guidance page on SSP

Unrounded daily rates Number of QDs in week 1 day to pay 2 days to pay 3 days to pay 4 days to pay 5 days to pay 6 days to pay 7 days to pay
£13.1500 7 £13.15 £26.30 £39.45 £52.60 £65.75 £78.90 £92.05
£15.3416 6 £15.35 £30.69 £46.03 £61.37 £76.71 £92.05
£18.4100 5 £18.41 £36.82 £55.23 £73.64 £92.05
£23.0125 4 £23.02 £46.03 £69.04 £92.05
£30.6833 3 £30.69 £61.37 £92.05
£46.0250 2 £46.03 £92.05
£92.0500 1 £92.05
Student Loan Recovery Thresholds

If you are employing any graduates and their earnings are above the payroll rates and thresholds for recovery then you will need to record these deductions and calculate and deduct the repayments from their wage.  The thresholds are based on two plans, depending on when and where the employee took out their loan, but a deduction rate of 9% applies in each case.

Graduate employee earnings threshold Plan 1
£18,330 per year (£352 per week, £1527 per month)

Graduate employee earnings threshold Plan 2
£25,000 per year (£480 per week, £2083 per month)

 All information sourced from https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2018-to-2019#paye-tax-and-class-1-national-insurance-contributions  Information correct as at the time of writing, January 2018.

 

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