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
Save time, effort and worry with our affordable payroll solutions and unlimited HR support.
Using our exclusive data we’ve created this domestic staff salary guide that reveals the average gross hourly and annual salaries across a range of job roles within the private staffing sector.
If you hire someone to work in your home, you are now classed as their employer and have various legal obligations to consider once they accept the job.
At Stafftax, we strongly advocate discussing and agreeing salaries in Gross terms. Find out more about the differences between Gross and Net, as well as the advantages for the employee.