Payroll Information Updates for Tax Year 2023/2024

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Payroll Information Updates for Tax Year 2023/2024

Payroll Information Updates for Tax Year 2023/2024

Welcome to our latest blog post on the crucial updates to payroll information for the upcoming tax year of 2023/2024. At Eternal Engagements, we understand the complexities and challenges of managing payroll, and that’s why we use the certified Sage business cloud payroll software combined with our team of experts. It allows us to stay ahead of the game and avoid common payroll mistakes, such as failing to update minimum wages or tax codes, which can lead to incorrect employee pay and inaccurate pension rates. In this blog, we’ll provide you with the latest updates and insights to ensure you stay compliant and up to date with your payroll responsibilities.

PAYE tax rates and thresholds

PAYE tax rates and thresholds 2023 to 2024
Employee personal allowance £242 per week
£1,048 per month
£12,570 per year
basic tax rate 20% on annual earnings above the PAYE tax threshold and up to £37,700
higher tax rate 40% on annual earnings from £37,701 to £125,140
additional tax rate 45% on annual earnings above £125,140

NI Thresholds

Class 1 National Insurance thresholds 2023 to 2024
LEL £123 per week

£533 per month

£6,396 per year

Primary threshold £242 per week
£1,048 per month
£12,570 per yearDirectors
For the whole tax year:£229 per week
£11,908 per year
Secondary Threshold (ST) £175 per week

£758 per month

£9,100 per year

Upper Secondary Threshold (under 21) (UST) £967 per week

£4,189 per month

£50,270 per year

Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) £967 per week

£4,189 per month

£50,270 per year

Upper Earnings Limit (UEL) £967 per week

£4,189 per month

£50,270 per year

Minimum wage rates

NB: Minimum Wage increase from 1st April 2023 as follows:

Apprentice Rate              £5.28

Aged under 18                 £5.28

18-20-Year-Old                £7.49

Adult Rate (21-22)           £10.18

Living Wage (23 +)           £10.42

 

 Statutory Maternity, Paternity, Adoption and Shared Parental Pay

Type of payment or recovery 2023 to 2024 rate
SMP – weekly rate for first 6 weeks 90% of the employee’s average weekly earnings
SMP – 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 employee’s average weekly earnings
SAP – 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
SMP/SPP/ShPP/SAP – 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

 

Sick Pay

Statutory Sick pay has increased to £109.40 per week

Student Loan and Postgraduate loan

In addition to student loan recovery, we now have post-graduate loan recovery, which will be deducted via payroll. It will be shown on new starter forms.

Rate or threshold 2023 to 2024 rate
Employee earnings threshold for student loan plan 1 £22,015 per year
£1,834.58 per month
£423.37 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
£1,750.00 per month
£403.84 per week
Postgraduate loan deductions 6%

  

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 the 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
H (apprentice under 25) 0% 12% 2%
M (under 21) 0% 12% 2%

 

Employer (secondary) contribution rates

You pay secondary contributions (employer’s National Insurance) to HMRC as part of your PAYE bill.

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%
H (apprentice under 25) 0% 0% 0% 13.8%
M (under 21) 0% 0% 0% 13.8%

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

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