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UK Payroll Rates & Thresholds (2026–2027)

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  • Updated

This guide outlines the key payroll rates, thresholds, and statutory payments for the 2026–27 tax year.

📢 Key Changes for 2026–27

Important updates affecting payroll this year

  • Statutory Sick Pay (SSP) is now payable from Day 1 (waiting days removed).
  • PIW rules for SSP have been removed from 6 April 2026.
  • Employees no longer need to earn at the LEL to qualify for SSP.
  • SSP weekly rate is the lower of £123.25 or 80% of Average Weekly Earnings (AWE).
  • Student Loan Plan 5 thresholds apply for deductions.

Income Tax Bands

England, Wales & Northern Ireland

BandTaxable IncomeTax Rate
Basic RateUp to £37,70020%
Higher Rate£37,701 – £125,14040%
Additional RateOver £125,14045%

Scotland

BandTaxable IncomeTax Rate
Starter RateUp to £3,96719%
Basic Rate£3,968 – £16,95620%
Intermediate Rate£16,957 – £31,09221%
Higher Rate£31,093 – £62,43042%
Advanced Rate£62,431 – £125,14045%
Top RateOver £125,14048%

Emergency Tax Codes

These codes are used when HMRC has not yet issued a tax code for an employee.

  • 1257L W1
  • 1257L M1
  • 1257L X

Income Tax Allowances

AllowanceAmount
Personal Allowance£12,570
Marriage Allowance£1,260
Blind Person’s Allowance£3,250

Important: Personal Allowance begins to reduce once income exceeds £100,000.

National Insurance Contributions (NIC)

Class 1 Thresholds

ThresholdWeeklyMonthlyYearly
Lower Earnings Limit£129£559£6,708
Primary Threshold£242£1,048£12,570
Secondary Threshold£96£417£5,000
Upper Earnings Limit£967£4,189£50,270

📢 Employer NIC on Benefits

Employers must pay Class 1A and Class 1B NIC at 15% on expenses and benefits provided to employees.

Student Loan Deductions

Loan TypeRateWeeklyMonthlyAnnual
Plan 19%£517.30£2,241.66£26,900
Plan 29%£565.09£2,448.75£29,385
Plan 49%£649.90£2,816.25£33,795
Plan 5 (NEW)9%£480.76£2,083.33£25,000
Postgraduate Loan6%£403.84£1,750£21,000

National Minimum Wage

Age GroupHourly Rate
21 and over (National Living Wage)£12.71
18–20£10.85
Under 18£8.00
Apprentices£8.00

Real Living Wage

LocationHourly Rate
UK£13.45
London£14.80

Statutory Payments

PaymentRate
Statutory Maternity Pay6 weeks at 90% AWE, then £194.32 or 90% AWE
Statutory Adoption PaySame as SMP
Statutory Paternity Pay£194.32 or 90% AWE
Shared Parental PayUp to 37 weeks
Parental Bereavement PayUp to 37 weeks
Neonatal Care PayUp to 12 weeks
Statutory Sick Pay£123.25 per week

📢 Small Employers Relief

If your Class 1 NIC bill was £45,000 or less in the previous tax year:

  • You can reclaim 100% of statutory payments
  • You receive an additional 9% compensation

This means you can reclaim 109% from HMRC.

Employers who do not qualify can reclaim 92% of statutory payments.

Automatic Enrolment

ThresholdAmount
Earnings trigger£10,000
Lower qualifying earnings£6,240
Upper qualifying earnings£50,270

Other Allowances

AllowanceAmount
Employment Allowance£10,500 per year
Apprenticeship Levy Allowance£15,000 per year

Company Car Tax (BIK)

CO₂ EmissionsElectric RangeBIK Rate
0g/km–4%
1–50g/km130+ miles4%
1–50g/km70–129 miles7%
1–50g/km40–69 miles10%
1–50g/km30–39 miles14%
1–50g/kmUp to 30 miles16%

Maximum BIK rate: 37%
Non-RDE2 diesel vehicles incur an additional 4% supplement.

Van & Fuel Benefit Charges

BenefitAmount
Van Benefit Charge£4,170
Car Fuel Benefit Charge£29,200
Van Fuel Benefit Charge£798

Mileage Allowance Payments

VehicleFirst 10,000 MilesAfter 10,000
Cars & Vans45p25p
Bicycle20p20p
Motorcycle24p24p
Passenger rate5p5p

📅 Key Payroll Dates

DateDeadline
1 AprilNew Minimum Wage rates apply
6 AprilStart of the new tax year
19 AprilFinal RTI submissions deadline (2025–26)
31 MayDeadline to provide P60s
6 JulyDeadline to submit P11Ds
19 JulyClass 1A NIC payment (cheque)
22 JulyClass 1A NIC payment (electronic)

 

 

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