Employer Focus: Payroll Changes for 2024-25
Brighten up your payroll knowledge with the new legislation and changes in the Spring Budget for the 2024-25 tax year.
·4 min read
Brighten up your payroll knowledge with the new legislation and changes in the Spring Budget for the 2024–25 tax year.
PAYE
The standard employee personal allowance for the 2024 to 2025 tax year is:
· £242 per week
· £1,048 per month
· £12,570 per year
Tax bands and rates for England, Northern Ireland and Wales
Income tax bands 2024-25 (England, Wales and Northern Ireland)
Band | Taxable income | Tax rate |
|---|---|---|
Personal Allowance | Up to £12,570 | 0% |
Basic Rate | £12,571 to £50,270 | 20% |
Higher Rate | £50,271 to £125,140 | 40% |
Additional Rate | Over £125,140 | 45% |
Tax bands and rates for Scotland
Scottish income tax bands 2024-25
Band | Taxable income | Tax rate |
|---|---|---|
Personal Allowance | Up to £12,570 | 0% |
Starter Rate | £12,571 to £14,876 | 19% |
Basic Rate | £14,877 to £26,561 | 20% |
Intermediate Rate | £26,562 to £43,662 | 21% |
Higher Rate | £43,663 to £75,000 | 42% |
Advanced Rate | £75,001 to £125,140 | 45% |
Top Rate | Over £125,140 | 48% |
National Insurance
In the Spring Budget it was announced that from 6th April 2024, National Insurance will be cut:
Class 1: From 10% to 8% for employees
Class 4: From 8% to 6% for self-employed people
The National Insurance Class 1A rate on expenses and benefits for 2024 to 2025 is 13.8%.
The National Insurance Class 1A rate on termination awards and sporting testimonial payments for 2024 to 2025 is 13.8%.
The National Insurance Class 1B rate for 2024 to 2025 is 13.8%.
Class 1 National Insurance Thresholds
National Insurance thresholds 2024-25
Threshold | Per week | Per month | Per year |
|---|---|---|---|
Lower earnings limit | £123 | £533 | £6,396 |
Primary threshold | £242 | £1,048 | £12,570 |
Secondary threshold | £175 | £758 | £9,100 |
Freeport upper secondary threshold | £481 | £2,083 | £25,000 |
Investment Zone upper secondary threshold | £481 | £2,083 | £25,000 |
Upper secondary threshold (under 21) | £967 | £4,189 | £50,270 |
Apprentice upper secondary threshold (apprentice under 25) | £967 | £4,189 | £50,270 |
Veterans upper secondary threshold | £967 | £4,189 | £50,270 |
Upper earnings limit | £967 | £4,189 | £50,270 |
Class 1 National Insurance Rates
Employee (primary) contribution rates
Employee (primary Class 1) National Insurance rates 2024-25
NI category letter | Lower earnings limit to primary threshold | Primary threshold to upper earnings limit | Over upper earnings limit |
|---|---|---|---|
A | 0% | 8% | 2% |
B | 0% | 1.85% | 2% |
C | nil | nil | nil |
D (Investment Zone — deferment) | 0% | 2% | 2% |
E (Investment Zone — married women and widows reduced rate) | 0% | 1.85% | 2% |
F (Freeport) | 0% | 8% | 2% |
H (apprentice under 25) | 0% | 8% | 2% |
I (Freeport — married women and widows reduced rate) | 0% | 1.85% | 2% |
J | 0% | 2% | 2% |
K (Investment Zone — state pensioner) | nil | nil | nil |
L (Freeport — deferment) | 0% | 2% | 2% |
M (under 21) | 0% | 8% | 2% |
N (Investment Zone) | 0% | 8% | 2% |
S (Freeport — state pensioner) | nil | nil | nil |
V (veteran) | 0% | 8% | 2% |
Z (under 21 — deferment) | 0% | 2% | 2% |
Employer (secondary) contribution rates
Employer (secondary Class 1) National Insurance rates 2024-25
NI category letter | Lower earnings limit up to and including secondary threshold | Above secondary threshold up to and including the Freeport and Investment Zone upper secondary thresholds | Above the Freeport and Investment Zone upper secondary thresholds up to and including the upper earnings limit and upper secondary thresholds (under 21s, apprentices and veterans) | Above the upper earnings limit and upper secondary thresholds (under 21s, apprentices and veterans) |
|---|---|---|---|---|
A | 0% | 13.80% | 13.80% | 13.80% |
B | 0% | 13.80% | 13.80% | 13.80% |
C | 0% | 13.80% | 13.80% | 13.80% |
D (Investment Zone — deferment) | 0% | 0% | 13.80% | 13.80% |
E (Investment Zone — married women and widows reduced rate) | 0% | 0% | 13.80% | 13.80% |
F (Freeport) | 0% | 0% | 13.80% | 13.80% |
H (apprentice under 25) | 0% | 0% | 0% | 13.80% |
I (Freeport — married women and widows reduced rate) | 0% | 0% | 13.80% | 13.80% |
J | 0% | 13.80% | 13.80% | 13.80% |
K (Investment Zone — state pensioner) | 0% | 0% | 13.80% | 13.80% |
L (Freeport — deferment) | 0% | 0% | 13.80% | 13.80% |
M (under 21) | 0% | 0% | 0% | 13.80% |
N (Investment Zone) | 0% | 0% | 13.80% | 13.80% |
S (Freeport — state pensioner) | 0% | 0% | 13.80% | 13.80% |
V (veteran) | 0% | 0% | 0% | 13.80% |
Z (under 21 — deferment) | 0% | 0% | 0% | 13.80% |
National Minimum Wage change from 1st April 2024
National Minimum Wage
Category | Rate from April 2024 | Rate from April 2023 | Increase |
|---|---|---|---|
Aged 21 and above (National Living Wage) | £11.44 | £10.42 | £1.02 |
Aged 18 to 20 | £8.60 | £7.49 | £1.11 |
Aged under 18 (but above compulsory school leaving age) | £6.40 | £5.28 | £1.12 |
Apprentices aged under 19 | £6.40 | £5.28 | £1.12 |
Apprentices aged 19 and over, in the first year of their apprenticeship | £6.40 | £5.28 | £1.12 |
An Employee on the Minimum Wage over 21 that works 160 hours a month will see a decrease of £103.87 in Employee NIC in 2024–25 compared to 2023–24 with an overall increase in Net Pay of £1,670.67 for the tax year 2024–25 in comparison to 2023–24 due to the increase of the National Minimum Wage and the decrease in the Employee NIC to 8%.
Student Loan Rates
Student loan thresholds 2024-25
Plan | Weekly | Monthly | Annually | Rate |
|---|---|---|---|---|
Plan 1 | £480.57 | £2,082.50 | £24,990.00 | 9% |
Plan 2 | £524.90 | £2,274.58 | £27,295.00 | 9% |
Plan 4 | £603.75 | £2,616.25 | £31,395.00 | 9% |
Postgraduate Loan | £403.84 | £1,750.00 | £21,000.00 | 6% |
New Statutory Rates
The new Statutory Sick Pay rate is applicable from 6th April 2024 and the new parental statutory pay rates are applicable from the first Sunday in the new tax year 7th April 2024.
Statutory pay rates 2024-25 (weekly)
Payment | Weekly rate |
|---|---|
Statutory Sick Pay | £116.75 |
Statutory Maternity Pay | £184.03 |
Statutory Paternity Pay | £184.03 |
Statutory Adoption Pay | £184.03 |
Shared Parental Pay | £184.03 |
Statutory Parental Bereavement Pay | £184.03 |
Automatic Enrolment
The thresholds for the 2024/2025 remain the same as the previous three tax years.
Auto-enrolment earnings thresholds 2024-25
Threshold | Monthly | Annual |
|---|---|---|
Lower level of qualifying earnings | £520 | £6,240 |
Earnings trigger | £833 | £10,000 |
Upper level of qualifying earnings | £4,189 | £50,270 |
Employment Allowance
The Employment Allowance remains the same at £5,000.
Apprenticeship Levy
The Apprenticeship Levy rate remains at 0.5% and the allowance does not change from £15,000.
This content may have been developed with the assistance of AI tools. Content is reviewed by a member of the Bright team before publication. Guidance on legislation can be obtained from your industry body.
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