The new Government Rates for the Tax Year 2019-20 came in to effect on 6th April.
| 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. |
| Tax Threshold | Over £240 gross per week | If you pay your employee £240 or more you must now also deduct tax on from your employee. |
| 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. |
| 19 January | 19 April | 19 July | 19 October |
| If your monthly liability bill exceeds £1500 per month you must pay HMRC every month. | |||
From 6 April 2019
| Age 18-20 | £6.15 per hour gross |
| Age 21-24 | £7.70 per hour gross |
| Age 25+ | £8.21 per hour gross |
| Offset Allowance | £52.85 per 7-day week |
Redundancy Pay Entitlement
| Age 18-21 | Half a week's pay or £244.50, whichever is lower |
| Age 22-40 | One week's pay or £489, whichever is lower |
| Age 41-retirement | 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 |
| £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. |
| Pay reference period | |||||||
| 2019 - 2020 | Annual | 1 week | Fortnight | 4 weeks | 1 month | 1 quarter | Bi-annual |
| Lower level of qualifying earnings | £6,136 | £118 | £236 | £472 | £512 | £1,534 | £3,068 |
| Earnings trigger for automatic enrolment | £10,000 | £192 | £384 | £768 | £833 | £2,499 | £4,998 |
Upper level of qualifying earnings |
£50,000 | £962 | £1,924 | £3,847 | £4,167 | £12,500 | £25,000 |
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.
Example:
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
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The new Tax Year comes into effect on 6 April 2019 and there were three main changes that affected employees and employers. Find out more from our new tax year blog.