The new Government Rates for the Tax Year 2019-20 came in to effect on 6th April.
Tax and National Insurance Thresholds
|Lower Earnings Limit
||£118 gross per week or less
||If you pay your employee the LEL or below, there is nothing due to HMRC and your employee will not be entitled to any state pensions or benefits.
|Bracket between Lower Earnings Limit and NI Threshold
||Between £118-£166 gross per week
||If you pay your employee between these figures there is nothing due to HMRC, however you should still register so your employee will be entitled to state pension and benefits.
|Employer's (Secondary) NI Threshold
||£166 gross per week or more
||If you pay your employee £166 or more you must register and pay Employer’s NI.
|Employee's (Primary) NI Threshold
||£166 gross per week or more
||If you pay your employee £166 or more you must now deduct National Insurance on behalf of your employee, as well as pay Employer’s NI.
||Over £240 gross per week
||If you pay your employee £240 or more you must now also deduct tax on from your employee.
Tax and NI Payments
|If your Tax and NI bill is below £1500 per month you only have to pay the Tax and NI to HMRC on a quarterly basis. Be aware that late payments can result in hefty fines and interest being applied.
|If your monthly liability bill exceeds £1500 per month you must pay HMRC every month.
National Minimum Wage (NMW)
From 6 April 2019
||£6.15 per hour gross
||£7.70 per hour gross
||£8.21 per hour gross
||£52.85 per 7-day week
Redundancy Pay Entitlement
||Half a week's pay or £244.50, whichever is lower
||One week's pay or £489, whichever is lower
||One and a half week's pay or £733.50, whichever is lower
|Stafftax clients are advised to call our offices for further assistance on accurately calculating Redundancy Pay.
Statutory Maternity Pay (SMP)
|The first 6 weeks of SMP are paid at 90% of average gross weekly earnings. The remaining weeks of the maternity pay period (up to a maximum of 33 weeks) are paid at the rate of £148.68 gross per week, or 90% of average gross weekly earnings, whichever is lower.
Statutory Sick Pay (SSP)
|£94.25 gross per week
||The first 3 consecutive days of illness are unpaid. SSP starts on the fourth consecutive day of illness, up to 28 weeks
Student Loan Recovery
|£364.13 gross per week
||If your employee has a student loan and they are earning £18,935 gross per year (£1,577.91 gross per month, £364.13 gross per week) or more, student loan repayments must be deducted from their salary.
Automatic enrolment earnings threshold
|Pay reference period
|2019 - 2020
||1 week||Fortnight||4 weeks||1 month||1 quarter||Bi-annual
|Lower level of qualifying earnings
|Earnings trigger for automatic enrolment
Upper level of qualifying earnings
Using our default service, we calculate the pension contribution on the earnings between the lower and upper earnings limit. This is referred to as qualifying earnings. The pension contribution is 4% employee and 3% employer of the qualifying earnings, with 1% tax relief added directly in to the pension scheme by the government.
Gross monthly pay: £1,000
Deduct the lower earnings limit: £1,000 - £512 = £488
4% of £488 = £19.52
3% of £488 = £14.64
1% of £488 = £4.88 tax relief
Gross weekly pay:
Deduct the lower earnings limit = £250 - £118 = £132
4% of £132 = £5.28 Employee Contributions
3% of £132 = £3.96 Employer Contributions
1% of £132 = £1.32 Tax Relief