Use these rates and thresholds when you operate your payroll or provide expenses and benefits to your employees.
Unless otherwise stated, the figures quoted apply between 6 April 2015 and 5 April 2016.
PAYE tax and Class 1 National Insurance contributions
You normally operate PAYE as part of your payroll so HM Revenue and Customs (HMRC) can collect Income Tax and National Insurance from your employees.
Your payroll software will calculate how much tax and National Insurance (NI) to deduct from your employees’ pay.
Tax thresholds, rates and codes
|PAYE tax rates, thresholds and codes||2015 to 2016|
|Employee personal allowance||£204 per week
£883 per month
£10,600 per year
|Basic tax rate||20% on annual earnings above the PAYE tax threshold and up to £31,785|
|Higher tax rate||40% on annual earnings from £31,786 to £150,000|
|Additional tax rate||45% on annual earnings above £150,000|
|Emergency tax codes||1060L W1, 1060L M1 or 1060L X|
Class 1 National Insurance thresholds
You can only make National Insurance (NI) deductions on earnings above the Lower Earnings Limit (LEL).
|Class 1 NI thresholds||2015 to 2016|
|Lower Earnings Limit (LEL)||£112 per week
£486 per month
£5,824 per year
|Primary Threshold (PT)||£155 per week
£672 per month
£8,060 per year
|Secondary Threshold (ST)||£156 per week
£676 per month
£8,112 per year
|Upper Accrual Point (UAP)||£770 per week
£3,337 per month
£40,040 per year
|Upper Secondary Threshold (under 21) (UST)||£815 per week
£3,532 per month
£42,385 per year
|Upper Earnings Limit (UEL)||£815 per week
£3,532 per month
£42,385 per year
Class 1 National Insurance rates
Employee (primary) contribution rates
Deduct primary contributions (employee’s National Insurance) from your employees’ pay through PAYE.
|NI category letter||Earnings at or above LEL up to and including PT||Earnings above the PT up to and including UAP||Earnings above UAP up to and including UEL||Balance of earnings above UEL|
|I (under 21)||1.4% rebate||10.60%||12%||2%|
|K (under 21 - deferment)||1.4% rebate||2%||2%||2%|
|M (under 21)||0%||12%||12%||2%|
|Z (under 21 - deferment)||0%||2%||2%||2%|
Employer (secondary) contribution rates
You pay secondary contributions (employer’s National Insurance) to HMRC as part of your PAYE bill.
|NI category letter||Earnings at or above LEL up to and including ST||Earnings above ST up to and including UAP||Earnings above UAP up to and including UEL/UST||Balance of earnings above UEL/UST||NICs rebate on earnings above LEL, up to and including ST||NICs rebate on earnings above ST, up to and including UAP|
|I (under 21)||0%||0%||0%||13.80%||3.40%||3.40%|
|K (under 21 - deferment)||0%||0%||0%||13.80%||3.40%||3.40%|
|M (under 21)||0%||0%||0%||13.80%||N/A||N/A|
|Z (under 21 - deferment)||0%||0%||0%||13.80%||N/A||N/A|
Class 1A National Insurance: expenses and benefits
|NI class||2015 to 2016 rate|
Class 1B National Insurance: PAYE Settlement Agreements (PSAs)
You pay Class 1B National Insurance if you have a PSA. This allows you to make one annual payment to cover all the tax and National Insurance due on small or irregular taxable expenses or benefits for your employees.
|NI class||2015 to 2016 rate|
National Minimum Wage
The National Minimum Wage is the minimum pay per hour almost all workers are entitled to by law. Use the National Minimum Wage calculator to check if you’re paying a worker the National Minimum Wage or if you owe them payments from past years.
The rates below apply from 1 October 2015 and are likely to change again on 1 October 2016.
|Category of worker||Hourly rate|
|Aged 21 and above||£6.70|
|Aged 18 to 20 inclusive||£5.30|
|Aged under 18 (but above compulsory school leaving age)||£3.87|
|Apprentices aged under 19||£3.30|
|Apprentices aged 19 and over, but in the first year of their apprenticeship||£3.30|
Statutory maternity, paternity and adoption pay
Use the maternity and paternity calculator for employers to calculate your employee’s SMP, paternity or adoption pay, their qualifying week, average weekly earnings and leave period.
|Type of payment or recovery||2015 to 2016 rate|
|Statutory maternity pay (SMP) - weekly rate for first six weeks||90% of the employee’s average weekly earnings|
|SMP - weekly rate for remaining weeks||£139.58 or 90% of the employee’s average weekly earnings, whichever is lower|
|Ordinary statutory paternity pay (OSPP) and Additional Statutory Paternity Pay (ASPP) - weekly rate||£139.58 or 90% of the employee’s average weekly earnings, whichever is lower|
|Statutory adoption pay (SAP) - weekly rate||£139.58 or 90% of the employee’s average weekly earnings, whichever is lower|
|SMP/OSPP/ASPP/SAP - proportion of your payments you can recover from HMRC||92% if your total Class 1 NI (both employee and employer contributions) is above £45,000 for the previous tax year
103% if your total Class 1 NI for the previous tax year is £45,000 or lower
Statutory Sick Pay (SSP)
The same weekly SSP rate applies to all employees. However, the amount you must actually pay an employee for each day they’re off work due to illness (the daily rate) depends on the number of ‘qualifying days’ (QDs) they work each week.
Use the SSP calculator to work out your employee’s sick pay, or use the rates below.
|Unrounded daily rates||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|
Student loan recovery
If your employees’ earnings are above the earnings threshold, record their student loan deductions in your payroll software. It will automatically calculate and deduct repayments from their pay.
|Rate or threshold||2015 to 2016 rate|
|Employee earnings threshold||£17,335 per year
£1,444 per month
£333 per week
|Student loan deductions||9%|
Company cars: Advisory Fuel Rates (AFRs)
Use AFRs to work out mileage costs if you provide company cars to your employees.
The rates below apply from 1 March 2016.
|Engine size||Petrol - amount per mile||LPG - amount per mile|
|1400cc or less||10 pence||7 pence|
|1401cc to 2000cc||12 pence||8 pence|
|Over 2000cc||19 pence||13 pence|
|Engine size||Diesel - amount per mile|
|1600cc or less||8 pence|
|1601cc to 2000cc||10 pence|
|Over 2000cc||11 pence|
Hybrid cars are treated as either petrol or diesel cars for this purpose.
Employee vehicles: Mileage Allowance Payments (MAPs)
MAPs are what you pay your employees for using their own vehicle for business journeys.
You can pay your employees an ‘approved amount’ of MAPs each year without having to report them to HMRC. To work out the ‘approved amount’, multiply your employee’s business travel miles for the year by the rate per mile for their vehicle.
Find out more about reporting and paying MAPs.
|Type of vehicle||Rate per business mile 2015 to 2016|
|Car||For tax purposes: 45 pence for the first 10,000 business miles in a tax year, then 25 pence for each subsequent mile
For NI purposes: 45 pence for all business miles
|Motorcycle||24 pence for both tax and NI purposes and for all business miles|
|Cycle||20 pence for both tax and NI purposes and for all business miles|