The new Government Rates for the Tax Year 2020-21 came in to effect as of the 6th April 2020.
Tax and National Insurance Thresholds
| Lower Earnings Limit |
£120 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 £120-£169 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 |
£169 gross per week or more |
If you pay your employee £169 or more you must register and pay Employer’s NI. |
| Employee's (Primary) NI Threshold |
£183 gross per week or more |
If you pay your employee £183 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's salary. |
Tax and NI Payments
| If your Tax and NI bill is below £1,500 per month you will 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. |
Payment Deadlines
| 19 January |
19 April |
19 July |
19 October |
| If your monthly liability bill exceeds £1,500 per month you must pay HMRC every month. |
National Minimum Wage (NMW)
From 6 April 2019
| Age 18-20 |
£6.45 per hour gross |
| Age 21-24 |
£8.20 per hour gross |
| Age 25+ |
£8.72 per hour gross |
| Offset Allowance |
£57.40 per 7-day week |
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 current SMP rate of £151.20 gross per week, or 90% of the employee's weekly earnings, whichever is lower. |
Statutory Sick Pay (SSP)
| The 2020-21 rate of SSP is £95.85 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 |
Automatic enrolment earnings threshold
The current earnings trigger for automatic enrolment into a pension scheme is £10,000. 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 current minimum pension contribution rate is 4% employee and 3% employer, of the qualifying earnings, with 1% tax relief added directly into the pension scheme by the government.
