Tax Rates and Thresholds

The rates and thresholds below, unless otherwise detailed, relate to the 2018/2019 tax year.

Employees National Insurance

Employee’s National Insurance is deducted from the employee’s gross salary.

In each employment the following thresholds apply. Unlike PAYE Tax you have a National Insurance allowance per employment and so these details relate only to your employee’s employment with you and are not affected by any other arrangements.

Weekly Gross Earnings Percentage NI Paid
Up to £116 0%
Between £116 and £162 0%
Between £162 and £892 12%
Above £892 2%

If your employee earns under £116 per week gross they will not be eligible for any statutory payments such as Statutory Sick Pay, Statutory Maternity Pay, Statutory Paternity Pay or Statutory Adoption Pay.

If your employee earns between £116 per week gross and £162 per week gross, they will not have to pay any NI contributions but will still be eligible for the statutory payments listed above.

Employers National Insurance

Employer’s National Insurance is paid in addition to the employee’s gross salary.

In each employment the following thresholds apply. Unlike PAYE Tax you have a National Insurance allowance per employment and so these details relate only to your employee’s employment with you and are not affected by any other arrangements.

Weekly Gross Earnings Percentage NI Paid if employee is 21 or over Percentage NI Paid if employee is under 21
Up to £162 0% 0%
Between £162 and £892 13.8% 0%
Above £892 13.8% 13.8%

If your employee is under 21 years of age, there will not be any Employer’s National Insurance charged until they earn over £892 per week gross.

Pay As You Earn Tax

The table below shows the standard tax rates and thresholds for the 2018-2019 tax year for employees living in England, Wales or Northern Ireland.  The standard tax code for this year is 1185L, this represents £11,850 tax free per annum.

These percentages of tax due are based on the employee’s entire income, not just the income from one job.

Weekly Gross Earnings Percentage Tax Paid
Up to £228 0%
Between £228 and £891 20%
Between £891 and £3112* 40%
Above £3112* 45%

* The personal allowance reduces where the individual’s income is above £100,000 per annum gross by £1 for every £2 above the limit.

Tax and NI Payments to HMRC

If your Tax and NI bill is below £1500 per month you only have to pay the Tax and NI to HMRC on a quarterly basis. Please be aware that late payments can result in hefty fines and interest being applied.

If your monthly liability bill exceeds £1500 per month you must pay HMRC every month.  Please be aware that late payments can result in hefty fines and interest being applied.

HMRC Payment Deadlines

If you pay your quarterly tax bill by bank transfer, HMRC must receive cleared funds by the following deadlines.

Payroll Period Bank transfer due to be cleared by (always the same month as the end of the payroll period)
6th April to 5th July 22nd July
6th July to 5th October 22nd October
6th October to 5th January 22nd January
6th January to 5th April 22nd April