As the new year unfolds, UK employers must be well-versed in the critical payroll updates taking effect in January 2024. Here’s a comprehensive overview:
National Insurance Contributions (NICs):
About Employee Class 1 NICs: A significant reduction from 12% to 10% in the main rate of primary Class 1 NICs for employees, effective January 6, 2024. This change is expected to benefit approximately 30 million UK employees.
Self-Employed Class 4 NICs: Self-employed workers will experience a reduction from 9% to 8% in the main rate of Class 4 NICs, effective April 6, 2024. Approximately 5.5 million self-employed individuals are anticipated to benefit from this adjustment.
National Living Wage (NLW) and National Minimum Wage (NMW):
National Living Wage: Prepare for a substantial 9.8% increase, bringing the NLW to £11.44 per hour from April 1, 2024—the most significant annual raise in over two decades. This rise also extends to those workers aged 21 and 22.
National Minimum Wage: Expect notable increases for specific age groups, with the NMW for 18-20-year-olds increasing by 14.8% to £8.60 and the 16-17-year-olds and apprentice rates both increasing by 21.2% to £6.40
Statutory Payment Rates:
Statutory Sick Pay (SSP): Effective April 1, 2024, the proposed SSP rate rises from £109.40 to £116.75 per week.
Statutory Maternity Pay (SMP) and Statutory Paternity Pay (SPP): Commencing April 6, 2024, expect an increase in SMP and SPP rates from 90% of average earnings up to a maximum of £1,566.66 per week to 90% of average earnings up to a maximum of £1,610 per week. The proposed new SMP/SPP rate rises from £172.48 to £184.03
Statutory Shared Parental Pay (ShPP) and Statutory Adoption Pay (SAP): Also starting April 6, 2024, the ShPP and SAP rates will increase from 90% of average earnings, up to a maximum of £663.33 per week to 90% of average earnings, up to a maximum of £675 per week.
Other Updates:
Real-Time Information (RTI): No alterations to RTI reporting requirements for employers in January 2024.
Investment Zone Employers National Insurance Relief (IZENR): The IZENR scheme will continue operating in 2024.
Employment Allowance: The Employment Allowance remains unchanged at £5,000 for 2024.
These are pivotal payroll updates for UK employers in January 2024. Staying abreast of these changes is vital to ensure your company complies with the latest regulations. Keep informed, stay compliant, and navigate the evolving payroll landscape effectively.