Rates and thresholds

Tax thresholds, rates and codes

PAYE tax rates, thresholds and codes 2016 to 2017
Employee personal allowance £212 per week
£917 per month
£11,000 per year
Basic tax rate 20% on annual earnings above the PAYE tax threshold and up to £32,000
Higher tax rate 40% on annual earnings from £32,001 to £150,000
Additional tax rate 45% on annual earnings above £150,000
Emergency tax codes 1100L W1, 1100L M1 or 1100L X

Class 1 National Insurance thresholds

You can only make National Insurance (NI) deductions on earnings above the Lower Earnings Limit (LEL).

Class 1 NI thresholds 2016 to 2017
Lower Earnings Limit (LEL) £112 per week
£486 per month
£5,824 per year
Primary Threshold (PT) £155 per week
£672 per month
£8,060 per year
Secondary Threshold (ST) £156 per week
£676 per month
£8,112 per year
Upper Secondary Threshold (under 21) (UST) £827 per week
£3,583 per month
£43,000 per year
Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) £827 per week
£3,583 per month
£43,000 per year
Upper Earnings Limit (UEL) £827 per week
£3,583 per month
£43,000 per year

Class 1 National Insurance rates

Employee (primary) contribution rates

NI category letter Earnings at or above LEL up to and including PT Earnings above the PT up to and including UEL Balance of earnings above UEL
A 0% 12% 2%
B 0% 5.85% 2%
C NIL NIL NIL
H (Apprentice under 25) 0% 12% 2%
J 0% 2% 2%
M (under 21) 0% 12% 2%
Z (under 21 – deferment) 0% 2% 2%

Employer (secondary) contribution rates

NI category letter Earnings at or above LEL up to and including ST Earnings above ST up to and including UEL/UST/AUST Balance of earnings above UEL/UST/AUST
A 0% 13.80% 13.80%
B 0% 13.80% 13.80 %
C 0% 13.80% 13.80%
H (Apprentice under 25) 0% 0% 13.80%
J 0% 13.80% 13.80%
M (under 21) 0% 0% 13.80%
Z (under 21 – deferment) 0% 0% 13.80%

Class 1A National Insurance: expenses and benefits

NI class 2016 to 2017 rate
Class 1A 13.8%

Class 1B National Insurance: PAYE Settlement Agreements (PSAs)

You pay Class 1B National Insurance if you have a PSA. This allows you to make one annual payment to cover all the tax and National Insurance due on small or irregular taxable expenses or benefits for your employees.

NI class 2016 to 2017 rate
Class 1B 13.8%

National Minimum Wage

Category of worker Hourly rate
Aged 25 and above (national living wage rate) £7.20
Aged 21 to 24 inclusive £6.95
Aged 18 to 20 inclusive £5.55
Aged under 18 (but above compulsory school leaving age) £4.00
Apprentices aged under 19 £3.40
Apprentices aged 19 and over, but in the first year of their apprenticeship £3.40

Statutory maternity, paternity, adoption and shared parental pay

Type of payment or recovery 2016 to 2017 rate
Statutory maternity pay (SMP) – weekly rate for first six weeks 90% of the employee’s average weekly earnings
SMP – weekly rate for remaining weeks £139.58 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory paternity pay (SPP) – weekly rate £139.58 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory adoption pay (SAP) – weekly rate for first six weeks 90% of employee’s average weekly earnings
SAP – weekly rate for remaining weeks £139.58 or 90% of the employee’s average weekly earnings, whichever is lower
Statutory shared parental pay (ShPP) – weekly rate £139.58 or 90% of the employee’s average weekly earnings, whichever is lower
SMP/SPP/ShPP/SAP – proportion of your payments you can recover from HMRC 92% if your total Class 1 NI (both employee and employer contributions) is above £45,000 for the previous tax year

103% if your total Class 1 NI for the previous tax year is £45,000 or lower

Statutory Sick Pay (SSP)

Unrounded daily rates Number of QDs in week 1 day to pay 2 days to pay 3 days to pay 4 days to pay 5 days to pay 6 days to pay 7 days to pay
£12.6357 7 £12.64 £25.28 £37.91 £50.55 £63.18 £75.82 £88.45
£14.7416 6 £14.75 £29.49 £44.23 £58.97 £73.71 £88.45
£17.6900 5 £17.69 £35.38 £53.07 £70.76 £88.45
£22.1125 4 £22.12 £44.23 £66.34 £88.45
£29.4833 3 £29.49 £58.97 £88.45
£44.2250 2 £44.23 £88.45
£88.4500 1 £88.45

Student loan recovery

Rate or threshold 2016 to 2017 rate
Employee earnings threshold for Plan 1 £17,495 per year
£1,457 per month
£336 per week
Employee earnings threshold for Plan 2 £21,000 per year
£1,750 per month
£403 per week
Student loan deductions 9%

Company cars: Advisory Fuel Rates (AFRs)

Engine size Petrol – amount per mile LPG – amount per mile
1400cc or less 10 pence 7 pence
1401cc to 2000cc 12 pence 8 pence
Over 2000cc 19 pence 13 pence
Engine size Diesel – amount per mile
1600cc or less 8 pence
1601cc to 2000cc 10 pence
Over 2000cc 11 pence

Employee vehicles: Mileage Allowance Payments (MAPs)

Type of vehicle Rate per business mile 2016 to 2017
Car For tax purposes: 45 pence for the first 10,000 business miles in a tax year, then 25 pence for each subsequent mile

For NI purposes: 45 pence for all business miles

Motorcycle 24 pence for both tax and NI purposes and for all business miles
Cycle 20 pence for both tax and NI purposes and for all business miles

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