RATES THRESHOLD FOR EMPLOYEE

Rates & Threshold for Employers

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

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

For the tax year 2016 to 2017, the Income Tax information below applies to both Scotland and the rest of the UK (England, Wales and Northern Ireland).

 

PAYE tax rates, thresholds and codes 2016-17
Employee personal allowance £212 per week
£917 per month
£11,000 per year
Basic tax rate 20% on annual earnings above the PAYE tax threshold and up to ££32,000
Higher tax rate 40% on annual earnings from £32,001 to £150,000
Additional tax rate 45% on annual earnings above £150,000
Emergency tax code 1100L W1, 1100L M1 or 1100L X

Class 1 National Insurance thresholds

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

 

Class 1 NICs thresholds 2016-17
Lower earnings limit (LEL) £112 per week
£486 per month
£ 5,824 per year
Primary Threshold (PT) £155 per week
£672 per month
£8060 per year
Secondary Threshold (ST) £156 per week
£676 per month
£8112 per year
Upper Secondary Threshold (under 21) (UST £827 per week
£3,583 per month
£43,000 per year
Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) £827 per week
£3,583 per month
£43,000 per year
Upper earnings limit (UEL) £827 per week
£3,583 per month £43,000 per year

Class 1 National Insurance rates

Employee (primary) contribution rates

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

NICs category letter Earnings at or above LEL up to and including PT Earnings above UAP 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% 12% 2%
M (under 21) 0% 12% 2%
Z (under 21 – deferment) 0% 2% 2%

Employer (secondary) contribution rates

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

Pay employers PAYE tax and National Insurance.

NICs category letter Earnings at or above LEL up to and including ST Earnings above ST up to and includingUEL/UST/AUST Balance of earnings aboveUEL/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%
I (under 21M (under 21) 0% 0% 13.80%
Z (under 21 – deferment) 0% 13.80% 13.80%

Class 1A National Insurance: expenses and benefits

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

NI class 2016 to 2017 rate
Class 1A 13.8%
Please feel free to contact us if you require any further information.
LEGAL NOTICE AND WARNING:
The information displayed in this section should not be used as a definitive guide, since individual circumstances may vary. Specific advice should be obtained where necessary. We accept no responsibility of use of above information on your own.