Rates and thresholds for employers 2020 to 2021
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 2020 to 5 April 2021.
PAYE tax and Class 1 National Insurance contributions
You normally operate PAYE as part of your payroll so 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鈥� 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.
England and Northern Ireland
| PAYE tax rates and thresholds | 2020 to 2021 |
|---|---|
| Employee personal allowance | 拢240 per week 拢1,042 per month 拢12,500 per year |
| English and Northern Irish basic tax rate | 20% on annual earnings above the PAYE tax threshold and up to 拢37,500 |
| English and Northern Irish higher tax rate | 40% on annual earnings from 拢37,501 to 拢150,000 |
| English and Northern Irish additional tax rate | 45% on annual earnings above 拢150,000 |
Scotland
| PAYE tax rates and thresholds | 2020 to 2021 |
|---|---|
| Employee personal allowance | 拢240 per week 拢1,042 per month 拢12,500 per year |
| Scottish starter tax rate | 19% on annual earnings above the PAYE tax threshold and up to 拢2,085 |
| Scottish basic tax rate | 20% on annual earnings from 拢2,086 to 拢12,658 |
| Scottish intermediate tax rate | 21% on annual earnings from 拢12,659 to 拢30,930 |
| Scottish higher tax rate | 41% on annual earnings from 拢30,931 to 拢150,000 |
| Scottish top tax rate | 46% on annual earnings above 拢150,000 |
Wales
| PAYE tax rates and thresholds | 2020 to 2021 |
|---|---|
| Employee personal allowance | 拢240 per week 拢1,042 per month 拢12,500 per year |
| Welsh basic tax rate | 20% on annual earnings above the PAYE tax threshold and up to 拢37,500 |
| Welsh higher tax rate | 40% on annual earnings from 拢37,501 to 拢150,000 |
| Welsh additional tax rate | 45% on annual earnings above 拢150,000 |
Emergency tax codes
The emergency tax codes from 6 April 2020 are:
- 1250L W1
- 1250L M1
- 1250L 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.
| Class 1 National Insurance thresholds | 2020 to 2021 |
|---|---|
| Lower earnings limit | 拢120 per week 拢520 per month 拢6,240 per year |
| Primary threshold | 拢183 per week 拢792 per month 拢9,500 per year |
| Secondary threshold | 拢169 per week 拢732 per month 拢8,788 per year |
| Upper secondary threshold (under 21) | 拢962 per week 拢4,167 per month 拢50,000 per year |
| Apprentice upper secondary threshold (apprentice under 25) | 拢962 per week 拢4,167 per month 拢50,000 per year |
| Upper earnings limit | 拢962 per week 拢4,167 per month 拢50,000 per year |
Class 1 National Insurance rates
Employee (primary) contribution rates
Deduct primary contributions (employee鈥檚 National Insurance) from your employees鈥� pay through PAYE.
| National Insurance category letter | Earnings at or above lower earnings limit up to and including primary threshold | Earnings above the primary threshold up to and including upper earnings limit | Balance of earnings above upper earnings limit |
|---|---|---|---|
| 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 鈥� deferment) | 0% | 2% | 2% |
Employer (secondary) contribution rates
You pay secondary contributions (employer鈥檚 National Insurance) to HMRC as part of your PAYE bill.
Pay employers鈥� PAYE tax and National Insurance.
| National Insurance category letter | Earnings at or above lower earnings limit up to and including secondary threshold | Earnings above secondary threshold up to and including upper earnings limit, upper secondary threshold, apprentice upper secondary threshold | Balance of earnings above upper earnings limit, upper secondary threshold, apprentice upper secondary threshold |
|---|---|---|---|
| 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 鈥� 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 on expenses and benefits at the end of each tax year.
Class 1A National Insurance: termination awards and sporting testimonial payments
Class 1A National Insurance contributions are due on the amount of termination awards paid to employees which exceed 拢30,000 and on the amount of sporting testimonial payments paid by independent committees which exceed 拢100,000. You report and pay Class 1A on these types of payments during the tax year as part of your payroll
| National Insurance class | 2020 to 2021 rate |
|---|---|
| Class 1A | 13.8% |
Pay employers鈥� 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 | 2020 to 2021 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鈥檙e paying a worker the National Minimum Wage or if you owe them payments from past years.
These rates apply from 1 April 2020.
| Category of worker | Hourly rate |
|---|---|
| Aged 25 and above (national living wage rate) | 拢8.72 |
| Aged 21 to 24 inclusive | 拢8.20 |
| Aged 18 to 20 inclusive | 拢6.45 |
| Aged under 18 (but above compulsory school leaving age) | 拢4.55 |
| Apprentices aged under 19 | 拢4.15 |
| Apprentices aged 19 and over, but in the first year of their apprenticeship | 拢4.15 |
National Minimum Wage rates for previous years.
Statutory Maternity, Paternity, Adoption, Shared Parental and Parental Bereavement Pay
Use the maternity, adoption and paternity calculator for employers to calculate your employee鈥檚 Statutory Maternity Pay (SMP), paternity or adoption pay, their qualifying week, average weekly earnings and leave period.
These rates apply from 5 April 2020.
| Type of payment or recovery | 2020 to 2021 rate |
|---|---|
| SMP 鈥� weekly rate for first 6 weeks | 90% of the employee鈥檚 average weekly earnings |
| SMP 鈥� weekly rate for remaining weeks | 拢151.20 or 90% of the employee鈥檚 average weekly earnings, whichever is lower |
| Statutory Paternity Pay (SPP) 鈥� weekly rate | 拢151.20 or 90% of the employee鈥檚 average weekly earnings, whichever is lower |
| Statutory Adoption Pay (SAP) 鈥� weekly rate for first 6 weeks | 90% of employee鈥檚 average weekly earnings |
| SAP 鈥� weekly rate for remaining weeks | 拢151.20 or 90% of the employee鈥檚 average weekly earnings, whichever is lower |
| Statutory Shared Parental Pay (ShPP) 鈥� weekly rate | 拢151.20 or 90% of the employee鈥檚 average weekly earnings, whichever is lower |
| Statutory Parental Bereavement Pay (SPBP) 鈥� weekly rate (applies from 6 April 2020) | 拢151.20 or 90% of the employee鈥檚 average weekly earnings, whichever is lower |
| SMP, SPP, ShPP, SAP or SPBP 鈥� proportion of your payments you can recover from HMRC | 92% if your total Class 1 National Insurance (both employee and employer contributions) is above 拢45,000 for the previous tax year 103% if your total Class 1 National Insurance for the previous tax year is 拢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鈥檙e off work due to illness (the daily rate) depends on the number of 鈥榪ualifying days鈥� they work each week.
Use the SSP calculator to work out your employee鈥檚 sick pay, or use these rates.
| Unrounded daily rates | Number of qualifying days 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 |
|---|---|---|---|---|---|---|---|---|
| 13.6928 | 7 | 13.70 | 27.39 | 41.08 | 54.78 | 68.47 | 82.16 | 95.85 |
| 15.9750 | 6 | 15.98 | 31.95 | 47.93 | 63.90 | 79.88 | 95.85 | 听 |
| 19.1700 | 5 | 19.17 | 38.34 | 57.51 | 76.68 | 95.85 | 听 | 听 |
| 23.9625 | 4 | 23.97 | 47.93 | 71.89 | 95.85 | 听 | 听 | 听 |
| 31.9500 | 3 | 31.95 | 63.90 | 95.85 | 听 | 听 | 听 | 听 |
| 47.9250 | 2 | 47.93 | 95.85 | 听 | 听 | 听 | 听 | 听 |
| 95.85 | 1 | 95.85 | 听 | 听 | 听 | 听 | 听 | 听 |
Student loan and postgraduate loan recovery
If your employees鈥� earnings are above the earnings threshold, record their student loan and postgraduate loan deductions in your payroll software. It will automatically calculate and deduct repayments from their pay.
| Rate or threshold | 2020 to 2021 rate |
|---|---|
| Employee earnings threshold for student loan plan 1 | 拢19,390 per year 拢1,615.83 per month 拢372.88 per week |
| Employee earnings threshold for student loan plan 2 | 拢26,575 per year 拢2,214.58 per month 拢511.05 per week |
| Student loan deductions | 9% |
| Employee earnings threshold for postgraduate loan | 拢21,000 per year 拢1,750.00 per month 拢403.84 per week |
| Postgraduate loan deductions | 6% |
Company cars: advisory fuel rates
Use advisory fuel rates to work out mileage costs if you provide company cars to your employees.
These rates apply from 1 March 2020.
| Engine size | Petrol 鈥� amount per mile | LPG 鈥� amount per mile |
|---|---|---|
| 1400cc or less | 12 pence | 8 pence |
| 1401cc to 2000cc | 14 pence | 10 pence |
| Over 2000cc | 20 pence | 14 pence |
| Engine size | Diesel 鈥� amount per mile |
|---|---|
| 1600cc or less | 9 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.
Advisory electricity rate for fully electric cars
Amount per mile 鈥� 4 pence.
Electricity is not a fuel for car fuel benefit purposes.
Employee vehicles: mileage allowance payments
Mileage allowance payments are what you pay your employees for using their own vehicle for business journeys.
You can pay your employees an approved amount of mileage allowance payments each year without having to report them to HMRC. To work out the approved amount, multiply your employee鈥檚 business travel miles for the year by the rate per mile for their vehicle.
Find out more about reporting and paying mileage allowance payments.
| Type of vehicle | Rate per business mile 2020 to 2021 |
|---|---|
| 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 |
Updates to this page
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Rates and thresholds for employers have been updated for the tax year 2020 to 2021.
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Rates and thresholds for employers have been updated for the tax year 2020 to 2021.
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First published.