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We’re less than 2 months away from the start of the new financial year, so it’s the right time to take a look at what’s new for 2019-20.

It’s 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 let’s get cracking!

Employee Personal Allowance, Tax Thresholds and Rates

The employee personal allowance will increase from £11,850.00 to £12,500.00 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. 

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. 

PAYE tax rates and thresholds 2018-19 2019-20 Effect

Employee personal allowance

 

£228.00 per week

£998.00 per month

£11,850.00 per year

£240.00 per week

£1,042.00 per month

£12,500.00 per year

Increased by:

£12.00 per week

£44.00 per month

£650.00 per year

English and Northern Irish basic tax rate 20% on annual earnings above the PAYE tax threshold and up to £34,500.00 20% on annual earnings above the PAYE tax threshold and up to £37,500.00 Increase of £3,000.00
English and Northern Irish higher tax rate 40% on annual earnings from £34,501.00 to £150,000.00 40% on annual earnings from £37,501.00 to £150,000.00 Increase of £3,000.00
English and Northern Irish additional tax rate 45% on annual earnings above £150,000.00 45% on annual earnings above £150,000.00 No change

 

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. 

Class 1 National Insurance thresholds 2018-19 2019-20 Effect
Lower Earnings Limit (LEL)

£116.00 per week

£503.00 per month

£6,032.00 per year

£118.00 per week

£512.00 per month

£6,136.00 per year

Increased by:

£2.00 per week

£9.00 per month

£104.00 per year

Primary Threshold (PT)

£162.00 per week

£702.00 per month

£8,424.00 per year

£166.00 per week

£719.00 per month

£8,632.00 per year

Increased by:

£4.00 per week

£17.00 per month

£208.00 per year

Secondary Threshold (ST)

£162.00 per week

£702.00 per month

£8,424.00 per year

£166.00 per week

£719.00 per month

£8,632.00 per year

Increased by:

£4.00 per week

£17.00 per month

£208.00 per year

Upper Secondary Threshold (under21) (UST)

£892.00 per week

£3,863.00 per month

£46,350.00 per year

£962.00 per week

£4,167.00 per month

£50,000.00 per year

Increased by:

£70.00 per week

£304.00 per month

£3,650.00 per year

Apprentice Upper Secondary Threshold (apprentice under 25) (AUST)

£892.00 per week

£3,863.00 per month

£46,350.00 per year

£962.00 per week

£4,167.00 per month

£50,000.00 per year

Increased by:

£70.00 per week

£304.00 per month

£3,650.00 per year

Upper Earnings Limit (UEL)

£892.00 per week

£3,863.00 per month

£46,350.00 per year

£962.00 per week

£4,167.00 per month

£50,000.00 per year

Increased by:

£70.00 per week

£304.00 per month

£3,650.00 per year

 

Class 1 National Insurance Rates – 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 – deferment) 0% 2% 2%

 

Class 1 National Insurance Rates – 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 – deferment) 0% 0% 13.8%

 

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. 

Category of Worker 2018-19 Hourly rate 2019-20 Hourly rate Effect
Aged 25 and above (national living wage rate) £7.83 £8.21 Increase of £0.38
Aged 21 to 24 inclusive £7.38 £7.70 Increase of £0.32
Aged 18-20 £5.90 £6.15 Increase of £0.25
Aged under 18 (but above compulsory school leaving age) £4.20 £4.35 Increase of £0.15
Apprentices aged under 19 £3.70 £3.90 Increase of £0.20
Apprentices aged 19 and over, but in the first year of their apprenticeship £3.70 £3.90 Increase of £0.20

 

 Statutory Maternity, Paternity, Adoption and Shared Leave Pay

The weekly payment for maternity, paternity, adoption and shared leave has increased from £145.18 to £148.68. 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

 

Statutory Sick Pay

Employees are entitled to a payment of £94.25 per week. This has increased from £89.35 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 ‘qualifying days’, 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
£13.4642 7 £13.47 £26.93 £40.40 £53.86 £67.33 £80.79 £94.25
£15.7083 6 £15.71 £31.42 £47.13 £62.84 £78.55 £94.25  
£18.8500 5 £18.85 £37.70 £56.55 £75.40 £94.25    
£23.5625 4 £23.57 £47.13 £70.69 £94.25      
£31.4166 3 £31.42 £62.84 £94.25        
£47.1250 2 £47.13 £94.25          
£94.24 1 £94.25            

 

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

£18,330.00 per year

£1,527.50 per month

£352.50 per week

£18,935.00 per year

£1,577.91 per month

£364.13 per week

Increase of:

£605.00 per year

£50.41 per month

£11.63 per week

Employee earnings threshold for Student loan Plan 2

£25,000.00 per year

£2,083.33 per month

£480.76 per week

£25,725.00 per year

£2,143.75 per month

£494.71 per week

Increase of:

£725.00 per year

£60.42 per month

£13.95 per week

Student loan deduction 9% 9% n/a
Employee earnings threshold for Postgraduate loan n/a

£21,000.00 per year

£1,750.00 per month

£403.84 per week

n/a
Postgraduate loan deduction n/a 6% n/a

You made it! That’s a quick overview of the thresholds and rates for 2019.

There’s more information available relating to expenses and benefits, and PAYE settlement agreements. There’s 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 you’re compliant whilst making your life simpler and easier.

Call the office today on 01384 92 90 20.

We’ll speak to you soon.