Guidance

Rates and thresholds for employers: 2018 to 2019

Use these rates and thresholds when you operate your payroll or provide expenses and benefits to your employees.

Unless otherwise stated, these figures apply from 6 April 2018 to 5 April 2019.

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 to deduct from your employees’ pay.

Tax thresholds, rates and codes

The amount of Income Tax you deduct from your employees depends on their tax code and how much of their taxable income is above their Personal Allowance.

There are different rates for Scotland.

PAYE tax rates and thresholds 2018 to 2019
Employee personal allowance £228 per week
£988 per month
£11,850 per year
UK basic tax rate 20% on annual earnings above the PAYE tax threshold and up to £34,500
UK higher tax rate 40% on annual earnings from £34,501 to £150,000
UK additional tax rate 45% on annual earnings above £150,000

Scotland

PAYE tax rates and thresholds 2018 to 2019
Employee personal allowance £228 per week
£988 per month
£11,850 per year
Scottish starter tax rate 19% on annual earnings above the PAYE tax threshold and up to £2,000
Scottish basic tax rate 20% on annual earnings from £2,001 to £12,150
Scottish intermediate tax rate 21% on annual earnings from £12,151 to £31,580
Scottish higher tax rate 41% on annual earnings from £31,581 to £150,000
Scottish top tax rate 46% on annual earnings above £150,000

Emergency tax codes

The emergency tax codes from 6 April 2018 are:

  • 1185L W1
  • 1185L M1
  • 1185L X

Find out more about emergency tax codes.

Class 1 National Insurance thresholds

You can only make National Insurance deductions on earnings above the Lower Earnings Limit (LEL).

Class 1 National Insurance thresholds 2018 to 2019
LEL £116 per week
£503 per month
£6,032 per year
Primary Threshold (PT) £162 per week
£702 per month
£8,424 per year
Secondary Threshold (ST) £162 per week
£702 per month
£8,424 per year
Upper Secondary Threshold (under 21) (UST) £892 per week
£3,863 per month
£46,350 per year
Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) £892 per week
£3,863 per month
£46,350 per year
Upper Earnings Limit (UEL) £892 per week
£3,863 per month
£46,350 per year

Class 1 National Insurance rates

Employee (primary) contribution rates

Deduct primary contributions (employee’s National Insurance) from your employees’ pay through PAYE.

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% 2%
C nil nil nil
H (Apprentice under 25) 0% 12% 2%
J 0% 2% 2%
M (under 21) 0% 12% 2%
Z (under 21 - deferment) 0% 2% 2%

Employer (secondary) contribution rates

You pay secondary contributions (employer’s National Insurance) to HMRC as part of your PAYE bill.

Pay employers’ PAYE tax and National Insurance.

National Insurance category letter Earnings at or above LEL up to and including ST Earnings above ST up to and including UEL/UST/AUST Balance of earnings above UEL/UST/AUST
A 0% 13.80% 13.80%
B 0% 13.80% 13.80%
C 0% 13.80% 13.80%
H (Apprentice under 25) 0% 0% 13.80%
J 0% 13.80% 13.80%
M (under 21) 0% 0% 13.80%
Z (under 21 - deferment) 0% 0% 13.80%

Class 1A National Insurance: expenses and benefits

You must pay Class 1A National Insurance on work benefits you give to your employees, example a company mobile phone. You report and pay Class 1A at the end of each tax year.

National Insurance class 2018 to 2019 rate
Class 1A 13.8%

Pay employers’ Class 1A National Insurance.

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.

National Insurance class 2018 to 2019 rate
Class 1B 13.8%

Pay Class 1B National Insurance.

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 April 2018.

Category of worker Hourly rate
Aged 25 and above (national living wage rate) £7.83
Aged 21 to 24 inclusive £7.38
Aged 18 to 20 inclusive £5.90
Aged under 18 (but above compulsory school leaving age) £4.20
Apprentices aged under 19 £3.70
Apprentices aged 19 and over, but in the first year of their apprenticeship £3.70

National Minimum Wage rates for previous years.

Statutory Maternity, Paternity, Adoption and Shared Parental Pay

Use the maternity and paternity calculator for employers to calculate your employee’s Statutory Maternity Pay (SMP), paternity or adoption pay, their qualifying week, average weekly earnings and leave period.

Type of payment or recovery 2018 to 2019 rate
SMP - weekly rate for first 6 weeks 90% of the employee’s average weekly earnings
SMP - weekly rate for remaining weeks £145.18 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory Paternity Pay (SPP) - weekly rate £145.18 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory Adoption Pay (SAP) - weekly rate for first 6 weeks 90% of employee’s average weekly earnings
SAP - weekly rate for remaining weeks £145.18 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory Shared Parental Pay (ShPP) - weekly rate £145.18 or 90% of the employee’s average weekly earnings, whichever is lower
SMP/SPP/ShPP/SAP - proportion of your payments you can recover from HMRC 92% if your total Class 1 National Insurance (both employee and employer contributions) is above £45,000 for the previous tax year

103% if your total Class 1 National Insurance 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
£13.1500 7 £13.15 £26.30 £39.45 £52.60 £65.75 £78.90 £92.05
£15.3416 6 £15.35 £30.69 £46.03 £61.37 £76.71 £92.05  
£18.4100 5 £18.41 £36.82 £55.23 £73.64 £92.05    
£23.0125 4 £23.02 £46.03 £69.04 £92.05      
£30.6833 3 £30.69 £61.37 £92.05        
£46.0250 2 £46.03 £92.05          
£92.0500 1 £92.05            

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 2018 to 2019 rate
Employee earnings threshold for Plan 1 £18,330 per year
£1,527.50 per month
£352.50 per week
Employee earnings threshold for Plan 2 £25,000 per year
£2,083.33 per month
£480.76 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 June 2018.

Engine size Petrol - amount per mile LPG - amount per mile
1400cc or less 11 pence 7 pence
1401cc to 2000cc 14 pence 9 pence
Over 2000cc 22 pence 14 pence
Engine size Diesel - amount per mile
1600cc or less 10 pence
1601cc to 2000cc 11 pence
Over 2000cc 13 pence

Hybrid cars are treated as either petrol or diesel cars for this purpose.

Advisory Fuel Rates for previous periods.

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 2018 to 2019
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 National Insurance purposes: 45 pence for all business miles
Motorcycle 24 pence for both tax and National Insurance purposes and for all business miles
Cycle 20 pence for both tax and National Insurance purposes and for all business miles
Published 4 January 2018
Last updated 21 May 2018 + show all updates
  1. Company cars: Advisory Fuel Rates (AFRs) has been updated.
  2. Minor updates to the rates and dates of the Advisory Fuel Rates for period 1 December 2017 to 28 February 2018.
  3. Scottish Income Tax rates updated following Parliamentary approval.
  4. First published.