Paying your workforce should be simple. But with ever-changing legislation and regulation, payroll can be one of the more tricky aspects of running a business. With this in mind, we’re here to help you get to grips with upcoming changes which all employers should be aware of.
Personal Allowance
The Personal Allowance – the income employees can take tax-free – is increasing to £11,850 in April 2018, meaning the new threshold (starting point) for PAYE is £228 per week or £988 per month. Also take note that the new emergency code will be 1185L.
| UK Rate | % | Bandwidth |
| Basic Rate | 20 | £1 to £34,500 |
| Higher Rate | 40 | £34,501 to £150,000 |
| Additional Rate | 45 | £150,001 and above |
Pension Increases
The minimum amounts you and your staff must pay into your workplace pension scheme will be increasing as of the 6 April 2018.
The total contribution will rise from 2 per cent to 5 per cent. Please refer to the table below to see the minimum contributions:
| Date Effective | Employer Minimum Contribution | Staff Contribution | Total Minimum Contribution |
| Currently until 5 April 2018 | 1% | 1% | 2% |
| 6 April 2018 – 5 April 2019 | 2% | 3% | 5% |
| 6 April 2019 onwards | 3%
|
5% | 8% |
National Minimum Wage
As planned, the National Minimum Wage (NMW) will increase again in April. You can find all the new rates below.
| Age Group | National Minimum Wage Rate |
|
25 + (National Living Wage)
|
£7.83 per hour |
|
21 – 24 |
£7.38 per hour
|
|
18 – 20 |
£5.90 per hour
|
|
Under 18 (but above compulsory school leaving age)
|
£4.20 per hour |
|
Apprentices Under 19
|
£3.70 per hour |
|
Apprentices aged 19+ (in first year of apprenticeship)
|
£3.70 per hour |
Statutory Payments
Employers are legally obliged to pay employees the statutory rate if they fall ill or have a child. It’s important you keep an open channel of communication about these payments and who is entitled to them. Please find the new rates below.
|
Statutory Payment Type |
Payment Amount |
|
SMP (Statutory Maternity Pay)
|
First 6 weeks at 90% of Average Weekly Earnings (AWE)
Thereafter £145.18 per week (or 90% of AWE, whichever is lower ) |
|
SPP (Statutory Paternity Pay) |
£145.18 per week (or 90% of AWE, whichever is lower)
|
|
SAP (Statutory Adoption Pay |
First 6 weeks @ 90% of Average Weekly Earnings (AWE)
Thereafter £145.18 per week (or 90% of AWE, whichever is lower )
|
|
SSP (Statutory Sick Pay)
|
£92.05 per week |