Business tax – guidance

Rates and thresholds for employers 2014 to 2015

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 2014 and 5 April 2015.

PAYE tax and Class 1 National Insurance contributions (NICs)

Tax thresholds, rates and codes

PAYE tax rates, thresholds and codes Figures to use 2014 to 2015
PAYE tax threshold £192 per week
£833 per month
£10,000 per year
Basic tax rate 20% on annual earnings above the PAYE tax threshold and up to £31,865
Higher tax rate 40% on annual earnings from £31,866 to £150,000
Additional tax rate 45% on annual earnings above £150,000
Emergency tax code 1000L

Class 1 NICs thresholds

Class 1 NICs thresholds Figures to use 2014 to 2015
Lower earnings limit (LEL) £111 per week
£481 per month
£5,772 per year
Primary Threshold (PT) £153 per week
£663 per month
£7,956 per year
Secondary Threshold (ST) £153 per week
£663 per month
£7,956 per year
Upper accrual point (UAP) £770 per week
£3,337 per month
£40,040 per year
Upper earnings limit (UEL) £805 per week
£3,489 per month
£41,865 per year

Class 1 NICs: rates for employee (primary) contributions

NICs deductions should not be made on earnings below the LEL.

NICs 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
A 0% 12% 12% 2%
B 0% 5.85% 5.85% 2%
C NIL NIL NIL NIL
D 0% 10.60% 12% 2%
E 0% 5.85% 5.85% 2%
J 0% 2% 2% 2%
L 0% 2% 2% 2%
NICs category letter NICs rebate on earnings above LEL, up to and including PT
A N/A
B N/A
C N/A
D 1.40%
E NIL
J N/A
L 1.40%

Class 1 NICs: rates for employer (secondary) contributions

NICs deductions should not be made on earnings below the LEL.

NICs 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 Balance of earnings above UEL NICs rebate on earnings above LEL, up to and including ST
A 0% 13.80% 13.80% 13.80% N/A
B 0% 13.80% 13.80% 13.80% N/A
C 0% 13.80% 13.80% 13.80% N/A
D 0% 10.40% 13.80% 13.80% 3.40%
E 0% 10.40% 13.80% 13.80% 3.40%
J 0% 13.80% 13.80% 13.80% N/A
L 0% 10.40% 13.80% 13.80% 3.40%

National minimum wage

The rates below apply from 1 October 2014 and are likely to change again on 1 October 2015.

Category of worker Hourly rate from 1 Oct 2014
Aged 21 and above £6.50
Aged 18 to 20 inclusive £5.13
Aged under 18 (but above compulsory school leaving age) £3.79
Apprentices aged under 19 £2.73
Apprentices aged 19 and over, but in the first year of their apprenticeship £2.73

Statutory maternity, paternity and adoption pay

Type of payment or recovery Figures to use 2014 to 2015
Statutory Maternity Pay (SMP) - weekly rate for first six weeks 90% of the employee’s average weekly earnings
SMP - weekly rate for remaining weeks £138.18 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 £138.18 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory Adoption Pay (SAP) - weekly rate £138.18 or 90% of the employee’s average weekly earnings, whichever is lower
SMP/OSPP/ASPP/SAP - proportion of your payments you can recover from HM Revenue and Customs 92% if your total Class 1 NICs (both employee and employer contributions) are above £45,000 for the previous tax year

103% if your total Class 1 NICs for the previous tax year are £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.

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
£12.5071 7 £12.51 £25.02 £37.53 £50.03 £62.54 £75.05 £87.55
£14.5916 6 £14.60 £29.19 £43.78 £58.37 £72.96 £87.55  
£17.5100 5 £17.51 £35.02 £52.53 £70.04 £87.55    
£21.8875 4 £21.89 £43.78 £65.67 £87.55      
£29.1833 3 £29.19 £58.37 £87.55        
£43.7750 2 £43.78 £87.55          
£87.5500 1 £87.55            

Student loan recovery

Rate or threshold Figures to use 2014 to 2015
Employee earnings threshold at which repayment of student loans begin £16,910 per year
£1,409.16 per month
£325.19 per week
Rate of student loan deductions 9%

Read more about the collection of student loan repayments.

Class 1A NICs: expenses and benefits

NICs class Rate 2014 to 2015
Class 1A NICs 13.8% - for benefits provided in 2014 to 2015

Company cars: Advisory Fuel Rates

The rates below apply from 1 December 2014.

Engine size Petrol LPG
1400cc or smaller 13p 9p
1401cc to 2000cc 16p 11p
Bigger than 2000cc 23p 16p
Engine size Diesel
1600cc or smaller 11p
1601cc to 2000cc 13p
Bigger than 2000cc 16p

Employee vehicles: mileage payments for business travel

Type of vehicle Rate per business mile 2014 to 2015
Car For tax purposes: 45p for the first 10,000 business miles in a tax year, then 25p for each subsequent mile

For NICs purposes: 45p for all business miles
Motorcycle 24p for both tax and NICs purposes and for all business miles
Cycle 20p for both tax and NICs purposes and for all business miles

Class 1B NICs: PAYE Settlement Agreements

NICs class Rate 2014 to 2015
Class 1B NICs 13.8% - for benefits provided in 2014 to 2015