Payroll Changes from April 2023

National Minimum Wage

Changes from April 2023 will be as follows: –

Income Tax and National Insurance

Income Tax thresholds as indicated below:

Personal allowance: £12,570

Standard Tax code: 1257L

Income tax: £12,571 – £50,270 @ basic rate 20%

                  £50,271 – 125,140 @ higher rate 40%

                  Over 125,140 @ additional rate 45%

Student Loan thresholds: Plan Type 1 £1834 per month

                                       Plan Type 2 £2,274 per month

                                       Plan Type 4 £2,305 per month

                                       Postgraduate Loan £1,750 per month

National insurance primary threshold: increase from £823 to £1048 per month or £190 to £242 per week.

National insurance secondary threshold: £758 per month or £175 per week.

Statutory Payments

The earnings threshold for statutory payments increases from £120 per week to £123 per week

Statutory maternity pay/statutory adoption pay: weekly rate increase from £156.66 to £172.48; the first 6 weeks will remain at 90% of the employee’s average weekly earnings

Statutory paternity pay/shared parental pay: weekly rate increases to £172.48

SSP: weekly rate increases from £99.35 to £109.40

Auto Enrolment

The Automatic Enrolment earnings threshold will remain at £10,000. The lower earnings limit of the qualifying earnings band will remain at £6,240 and the upper earnings limit of the qualifying earnings band will remain at £50,270.

Minimum pension contributions remain at 3% employer and 5% employee

Employment Allowance

Only businesses with an employer national insurance bill of £100,000 or less in the previous tax year will be eligible to claim Employment Allowance.

For businesses who are eligible to claim it, the Employment Allowance is £5000 for the year.