Weâre less than 2 months away from the start of the new financial year, so itâs the right time to take a look at whatâs new for 2019-20.
Itâs a little bit number heavy but the tables giving comparison with last years percentages and thresholds making it easier to pick your way through. Grab a coffee and a biscuit and letâs get cracking!
Employee Personal Allowance, Tax Thresholds and Rates
The employee personal allowance will increase from ÂŁ11,850.00 to ÂŁ12,500.00 from April. This means that an employee with a tax code of 1185L this year will most likely be given a tax code of 1250L in 2019-20, increasing the amount that an employee can earn each pay period before paying tax on their earnings.Â
The thresholds where the higher and additional tax rates begin have also increased for the coming financial year.
The table below compares the thresholds from 2018-19 to 2019-20.Â
| PAYE tax rates and thresholds | 2018-19 | 2019-20 | Effect |
|
Employee personal allowance  |
ÂŁ228.00 per week ÂŁ998.00 per month ÂŁ11,850.00 per year |
ÂŁ240.00 per week ÂŁ1,042.00 per month ÂŁ12,500.00 per year |
Increased by: ÂŁ12.00 per week ÂŁ44.00 per month ÂŁ650.00 per year |
| English and Northern Irish basic tax rate | 20% on annual earnings above the PAYE tax threshold and up to ÂŁ34,500.00 | 20% on annual earnings above the PAYE tax threshold and up to ÂŁ37,500.00 | Increase of ÂŁ3,000.00 |
| English and Northern Irish higher tax rate | 40% on annual earnings from ÂŁ34,501.00 to ÂŁ150,000.00 | 40% on annual earnings from ÂŁ37,501.00 to ÂŁ150,000.00 | Increase of ÂŁ3,000.00 |
| English and Northern Irish additional tax rate | 45% on annual earnings above ÂŁ150,000.00 | 45% on annual earnings above ÂŁ150,000.00 | No change |
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Class 1 National Insurance Thresholds
The National Insurance thresholds have increases slightly for the new financial year, meaning that employees can earn more money before National Insurance is deducted from their pay. National Insurance is only deducted from earnings over the Lower Earnings Limit.Â
| Class 1 National Insurance thresholds | 2018-19 | 2019-20 | Effect |
| Lower Earnings Limit (LEL) |
ÂŁ116.00 per week ÂŁ503.00 per month ÂŁ6,032.00 per year |
ÂŁ118.00 per week ÂŁ512.00 per month ÂŁ6,136.00 per year |
Increased by: ÂŁ2.00 per week ÂŁ9.00 per month ÂŁ104.00 per year |
| Primary Threshold (PT) |
ÂŁ162.00 per week ÂŁ702.00 per month ÂŁ8,424.00 per year |
ÂŁ166.00 per week ÂŁ719.00 per month ÂŁ8,632.00 per year |
Increased by: ÂŁ4.00 per week ÂŁ17.00 per month ÂŁ208.00 per year |
| Secondary Threshold (ST) |
ÂŁ162.00 per week ÂŁ702.00 per month ÂŁ8,424.00 per year |
ÂŁ166.00 per week ÂŁ719.00 per month ÂŁ8,632.00 per year |
Increased by: ÂŁ4.00 per week ÂŁ17.00 per month ÂŁ208.00 per year |
| Upper Secondary Threshold (under21) (UST) |
ÂŁ892.00 per week ÂŁ3,863.00 per month ÂŁ46,350.00 per year |
ÂŁ962.00 per week ÂŁ4,167.00 per month ÂŁ50,000.00 per year |
Increased by: ÂŁ70.00 per week ÂŁ304.00 per month ÂŁ3,650.00 per year |
| Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) |
ÂŁ892.00 per week ÂŁ3,863.00 per month ÂŁ46,350.00 per year |
ÂŁ962.00 per week ÂŁ4,167.00 per month ÂŁ50,000.00 per year |
Increased by: ÂŁ70.00 per week ÂŁ304.00 per month ÂŁ3,650.00 per year |
| Upper Earnings Limit (UEL) |
ÂŁ892.00 per week ÂŁ3,863.00 per month ÂŁ46,350.00 per year |
ÂŁ962.00 per week ÂŁ4,167.00 per month ÂŁ50,000.00 per year |
Increased by: ÂŁ70.00 per week ÂŁ304.00 per month ÂŁ3,650.00 per year |
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Class 1 National Insurance Rates â Employee Contributions
The percentages applied to calculate employees national insurance based on the threshold limits are shown below.
The National Insurance contribution percentage have not changed from 2018-19.
| National Insurance category letter | Earnings at or above LEL up to and including PT | Earnings above the PT up to and including UEL | Balance of earnings above UEL |
| A | 0% | 12% | 2% |
| B | 0% | 5.85% | 1% |
| C | nil | nil | nil |
| H (Apprentice under 25) | 0% | 12% | 2% |
| J | 0% | 2% | 2% |
| M | 0% | 12% | 2% |
| Z (under 21 â deferment) | 0% | 2% | 2% |
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Class 1 National Insurance Rates â Employer Contributions
The percentages applied to calculate employers national insurance based on the threshold limits are shown below.
The National Insurance contribution percentage have not changed from 2018-19.
| National Insurance category letter | Earnings at or above LEL up to and including PT | Earnings above the PT up to and including UEL/UST/AUST | Balance of earnings above UEL/UST/AUST |
| A | 0% | 13.8% | 13.8% |
| B | 0% | 13.8% | 13.8% |
| C | 0% | 13.8% | 13.8% |
| H (Apprentice under 25) | 0% | 0% | 13.8% |
| J | 0% | 13.8% | 13.8% |
| M (under21) | 0% | 0% | 13.8% |
| Z (under 21 â deferment) | 0% | 0% | 13.8% |
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National Minimum Wage
The National Minimum Wage is the minimum wage you must pay your employees, and is based on their age. This has increased from 2018-19, and the table below shows a comparison.Â
| Category of Worker | 2018-19 Hourly rate | 2019-20 Hourly rate | Effect |
| Aged 25 and above (national living wage rate) | ÂŁ7.83 | ÂŁ8.21 | Increase of ÂŁ0.38 |
| Aged 21 to 24 inclusive | ÂŁ7.38 | ÂŁ7.70 | Increase of ÂŁ0.32 |
| Aged 18-20 | ÂŁ5.90 | ÂŁ6.15 | Increase of ÂŁ0.25 |
| Aged under 18 (but above compulsory school leaving age) | ÂŁ4.20 | ÂŁ4.35 | Increase of ÂŁ0.15 |
| Apprentices aged under 19 | ÂŁ3.70 | ÂŁ3.90 | Increase of ÂŁ0.20 |
| Apprentices aged 19 and over, but in the first year of their apprenticeship | ÂŁ3.70 | ÂŁ3.90 | Increase of ÂŁ0.20 |
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 Statutory Maternity, Paternity, Adoption and Shared Leave Pay
The weekly payment for maternity, paternity, adoption and shared leave has increased from ÂŁ145.18 to ÂŁ148.68. Information relating to employee eligibility and how to calculate and manage these payments can be found by following the links below:
Maternity pay and leave – https://www.gov.uk/maternity-pay-leave
Statutory paternity pay – https://www.gov.uk/employers-paternity-pay-leave
Statutory adoption pay – https://www.gov.uk/employers-adoption-pay-leave
Statutory shared parental pay – https://www.gov.uk/shared-parental-leave-and-pay-employer-guide
Recovery of statutory payments – https://www.gov.uk/recover-statutory-payments
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Statutory Sick Pay
Employees are entitled to a payment of ÂŁ94.25 per week. This has increased from ÂŁ89.35 per week in 2018-19.
The employee is entitled to this payment regardless of whether they are a full-time or part-time employee.  Once the employee has been absent due to sickness for 4 âqualifying daysâ, the SSP daily rate is based on the number of qualifying days the employee works each week. The table below breaks down the daily rate based on the number of days the employee works.
| Unrounded daily rate | Number of QDs in week | 1 day to pay | 2 days to pay | 3 days to pay | 4 days to pay | 5 days to pay | 6 days to pay | 7 days to pay |
| ÂŁ13.4642 | 7 | ÂŁ13.47 | ÂŁ26.93 | ÂŁ40.40 | ÂŁ53.86 | ÂŁ67.33 | ÂŁ80.79 | ÂŁ94.25 |
| ÂŁ15.7083 | 6 | ÂŁ15.71 | ÂŁ31.42 | ÂŁ47.13 | ÂŁ62.84 | ÂŁ78.55 | ÂŁ94.25 | Â |
| ÂŁ18.8500 | 5 | ÂŁ18.85 | ÂŁ37.70 | ÂŁ56.55 | ÂŁ75.40 | ÂŁ94.25 | Â | Â |
| ÂŁ23.5625 | 4 | ÂŁ23.57 | ÂŁ47.13 | ÂŁ70.69 | ÂŁ94.25 | Â | Â | Â |
| ÂŁ31.4166 | 3 | ÂŁ31.42 | ÂŁ62.84 | ÂŁ94.25 | Â | Â | Â | Â |
| ÂŁ47.1250 | 2 | ÂŁ47.13 | ÂŁ94.25 | Â | Â | Â | Â | Â |
| ÂŁ94.24 | 1 | ÂŁ94.25 | Â | Â | Â | Â | Â | Â |
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Student Loan and Postgraduate Loan Recovery
In previous years, student loan repayments have been moved into payroll processing with a set percentage being taken from an employees pay above the earnings threshold. From the new financial year Postgraduate loans will be treated the same way.
The table below shows the comparison.
| Rate or threshold | 2018-19 rate | 2019-20 rate | Effect |
| Employee earnings threshold for Student loan Plan 1 |
ÂŁ18,330.00 per year ÂŁ1,527.50 per month ÂŁ352.50 per week |
ÂŁ18,935.00 per year ÂŁ1,577.91 per month ÂŁ364.13 per week |
Increase of: ÂŁ605.00 per year ÂŁ50.41 per month ÂŁ11.63 per week |
| Employee earnings threshold for Student loan Plan 2 |
ÂŁ25,000.00 per year ÂŁ2,083.33 per month ÂŁ480.76 per week |
ÂŁ25,725.00 per year ÂŁ2,143.75 per month ÂŁ494.71 per week |
Increase of: ÂŁ725.00 per year ÂŁ60.42 per month ÂŁ13.95 per week |
| Student loan deduction | 9% | 9% | n/a |
| Employee earnings threshold for Postgraduate loan | n/a |
ÂŁ21,000.00 per year ÂŁ1,750.00 per month ÂŁ403.84 per week |
n/a |
| Postgraduate loan deduction | n/a | 6% | n/a |
You made it! Thatâs a quick overview of the thresholds and rates for 2019.
Thereâs more information available relating to expenses and benefits, and PAYE settlement agreements. Thereâs also additional information relating company cars and employee vehicle fuel rates and mileage payments. Information about these can be found on the Gov.UK website at:
https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2019-to-2020
But PayrollAbility is here to save you the difficulty of trawling through this. We can take care of your payroll and ensure youâre compliant whilst making your life simpler and easier.
Call the office today on 01384 92 90 20.
Weâll speak to you soon.
