Payroll 2023-24 Key Highlights
Employee Tax codes for 2023-24
HMRC have announced that there will be NO uplifts of tax codes for tax year 2023-24. The ‘standard/emergency’ tax code for 2023-24 remains at 1257L. (S1257L in Scotland, C1257L in Wales).
Income tax rates and thresholds for 2023-24
The table below shows the income tax rates and thresholds in use for England, Wales and Northern Ireland. The threshold at which the additional rate (45%) applies is £125,140 from 6 April 2023 (the threshold was £150,000 in 2022-23)
| Income tax rates for England, Wales & Northern Ireland (annual earnings) | ||
| Basic rate | 20% | On earnings £12,570 to £50,270 |
| Higher rate | 40% | On earnings £50,271 to £125,140 |
| Additional rate | 45% | On earnings above £125,140 |
| (Rates assume a personal allowance of £12,570) | ||
The table below shows the income tax rates and thresholds in use for Scotland. The Higher Rate and Top Rates of tax have been increased by 1% point each, and the threshold at which the Top Rate applies is £125,140 from 6 April 2023.
| Income tax rates for Scotland (annual earnings) | ||
| Scottish Starter rate | 19% | On earnings £12,571 to £14,732 |
| Scottish Basic rate | 20% | On earnings £14,733 to £25,688 |
| Scottish Intermediate rate | 21% | On earnings £25,689 to £43,662 |
| Scottish Higher rate | 42% | On earnings £43,663 to £125,140 |
| Scottish Top rate | 47% | On earnings above £125,140 |
| (Rates assume a personal allowance of £12,570) | ||
National Insurance Contributions
The table below shows the National Insurance bands for 2023-24.
| Lower Earnings Limit (LEL) | Primary Threshold (PT) | Secondary Threshold (ST) for Employer NIC | Upper Earnings Limited (UEL) | |
| Weekly | 123 | 242 | 175 | 967 |
| 2-Weekly | 246 | 484 | 350 | 1,934 |
| 4-Weekly | 492 | 967 | 700 | 3,867 |
| Monthly | 533 | 1,048 | 758 | 4,189 |
| Directors Annual | 6,396 | 12,570 | 9,100 | 50,270 |
Note: For directors using the Standard Annual Earnings Period method of calculating NIC, the Annual Primary Threshold is £12,570, effective from 6 April 2023.
Auto Enrolment Pensions – Qualifying Earnings thresholds
The 2023-24 Auto Enrolment Qualifying Earnings thresholds remain unchanged.
The Lower level of Qualifying Earnings remains at £120 per week / £520 per month for 2023-24
The Upper level of Qualifying Earnings remains at £967 per week / £4,189 per month for 2023-24
The ‘trigger point’ (where employees need to be automatically enrolled) remains at £10,000 per year.
The minimum contribution percentages relating to Automatic Enrolment pension schemes have not changed for 2023-24, and remain at 5% for the employee and 3% for the employer.
New rates of Statutory Pay
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- The rate for Statutory Sick Pay (SSP) is £109.40 per week from April 2023 (the weekly rate was £99.35 in 2022-23).
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- The standard rate of Statutory Maternity, Paternity, Adoption Pay, Shared Parental Pay, and Parental Bereavement Pay (SMP, SPP, SAP, ShPP, SPBP) is £172.48 from April 2023 (the weekly rate was £156.66 in 2022-23).
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- The Lower Earnings Limit (LEL) for 2023-24 (i.e. the minimum amount an employee must earn in order to qualify for SSP, SMP etc) remains at £123.00 (the LEL was £123.00 in 2022-23.
National Minimum Wage increases.
The National Minimum wage rates are increasing from April 2023. The new hourly rates, applicable from 1 April 2023 are as follows:
- Aged 23 and above (national living wage rate) – £10.42
- Aged 21 to 22 inclusive – £10.18
- Aged 18 to 20 inclusive – £7.49
- Aged under 18 (but above compulsory school leaving age) – £5.28
- Apprentices aged under 19 – £5.28
- Apprentices aged 19 and over, but within the first year of their apprenticeship – £5.28
Student loan rates and thresholds – Plan 1, Plan 2, Plan 4 (Scotland) and Postgraduate loans.
From 6 April 2023 the threshold at which borrowers repay Student Loan Plan Type 1 loans will increase from £20,195 to £22,015 per year – Type 1 loans are those issued to students before 2012. The rate remains at 9%.
The threshold for Student Loan Plan Type 2 loans (issued after 2012) remains at £27,295 per year. The rate remains at 9%.
The threshold for Student Loan Plan Type 4 loans (Scotland) increases from £25,375 to £27,660 per year. The rate remains at 9%.
The threshold for Postgraduate Loans (PGL), remains at £21,000 per year, and the rate remains at 6%.
Employment Allowance
The Employment Allowance remains at £5000 in 2023-24 (i.e the same level as 2022-23).