Minimum Wage, Statutory Pay and Deduction Thresholds 2024-25

Mar 18, 2024 | National Minimum Wage, Payroll

Minimum Wage, Statutory Pay and Deduction Thresholds 2024-25

Picture of graph called payroll with a magnifying glass

Minimum wage rates change on 1^st April each year so it’s vitally important you are aware of the new rates and ensure you have checked your payroll software is up to date to ensure wages are calculated using the correct rates.

The hourly rate for the minimum wage depends on age and whether you are an apprentice. You must be at least:

school leaving age to get the National Minimum Wage
From 1 April 2024, workers aged 21 and over will be entitled to the National Living Wage – the minimum wage apply for workers aged 20 and under

Minimum Wage

	Rate from 1 April 2023	Rate from 1 April 2024	Increase
National Living Wage (NLW) for workers 21 and over	£10.42	£11.44	9.8%
18-20 year old rate (NMW)	£7.49	£8.60	14.8%
16-17 year old rate (NMW)	£5.28	£6.40	21.2%
Apprentice rate	£5.28	£6.40	21.2%

Personal Allowance & Income Tax

The amount of Income Tax you need to deduct from your employees’ wages depends on how much they earn and how much of their taxable income is above their personal allowance and which tax band it falls into.

Personal Allowance: 0% tax on earning up to £12,570.
The standard tax code is 1257L.
20% tax is due on earnings between £12,571 and £50,270.
40% tax is due on earnings between £50,271 and £125,140.
45% tax is due on earnings more than £125,140.

Emergency tax codes from 6^th April 2024 are as follows:

1257L W1
1257L M1
1257L X

Statutory Pay Rates

From 6^th April 2024 Statutory Sick Pay (SSP) is £116.75 per week, with the amount due based on the number of working days in the week.

From 7^th April 2024 the following statutory payments increase to £184.01 per week or 90% of average weekly earnings (AWE), whichever is the lower:

Statutory Maternity/Adoption Pay – eligible employees will receive up to 39 weeks of SMP/SAP at 90% of their average weekly earnings before tax – for the first 6 weeks of their leave, followed by £184.03 or 90% of their average weekly earnings (whichever is lower) – for the remaining 33 weeks of their leave.

Statutory Paternity Pay
Statutory Shared Parental Pay
Statutory Adoption Pay
Statutory Bereavement Pay

For further information about payroll rates for 2024-2025 visit the government website

National Minimum Wage and National Living Wage rates – GOV.UK (www.gov.uk)

Running your own payroll can be tricky, especially as you have to be sure you’re paying both your employees and HMRC the correct amount. If you’re worried about running payroll, why not outsource? We can take the stress away of payment deadlines and you can be sure you’re paying both your employees and HMRC correctly.

Book a discovery call

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ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

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The benefits of outsourcing your payroll

Jan 1, 2024 | Bookkeeping, Payroll

The benefits of outsourcing your payroll

Running your own payroll? How confident are you that you have a handle on everything?

Now don’t get me wrong there is some great payroll software out there, 𝘽𝙐𝙏 would you recognise if something didn’t quite look right and know how to check it? It only takes one small mistake to drastically alter the outcome of someone’s wages.

No matter what your payroll frequency, there is a lot you need to consider.

Checking for any tax code notifications.
Check your employees are being paid the correct amount, not only for the work they have done but also for their age.
Should any employees be in an auto enrolment pension scheme?
Do you have an apprentice, their pay can be quite confusing, because the minimum apprenticeship wage is linked to their age and how long they have been an apprentice.
Correctly calculating their starting / leaving pay.
Calculate and record holiday entitlement.
Understanding when to use a P45 or P46.
And that is before you factor in statutory pay and leave payments, which to be honest, can get complicated.

Having done payroll for several years I know it doesn’t take much for even the most straight forward payroll to get a little complicated, especially if we have to start considering SSP, SMP or pension schemes!!

Your software is only as good as the information entered into it. I’m sure no one wants to end up inadvertently paying their employees incorrectly. If you’ve been struggling and unsure of anything payroll related, have you ever thought of outsourcing? Yes, there is a cost to outsourcing but what about the benefits?

Time – have you ever worked out how much of your time is spent on payroll? Remember, your time is not free, could your time be better spent on your business, or would it offer you a little timeout?

Stress – I do payroll for a living and sometimes even I get stressed, what about you? Dealing with HMRC whether it be tax or payroll can be stressful, it doesn’t have to be.

Money – late payments, auto-enrolment failures, minimum wage non-compliance can all incur fines, but this can be avoided.

Outsourcing means you no longer have to worry about getting it right. A qualified payroll professional will ensure your payroll is processed correctly based on the information provided. They will take care of pay rate increases, pension opt in/opt out, statutory payments, holiday entitlement and act as your payroll agent with HMRC. This all helps to reduce the risk of errors and ensure compliance.

If this all sounds like a huge sigh of relief and you want to find out more, please get in touch.

Book a discovery call

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ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

Payroll rates and thresholds for 2023-24

Mar 21, 2023 | National Minimum Wage, Payroll

Payroll rates and thresholds for 2023-24

It can get quite overwhelming trying to keep up with all the updates when it comes to payroll rates and thresholds for your employees.

We can of course try our best to keep you in the loop with regular updates but if it does get too much as a busy business owner, you can outsource your payroll function. This way you won’t be worried about paying your staff the incorrect rates or stressing that they won’t be paid on time.

But for now here’s the latest information for you to absorb.

Minimum Wage

The minimum wage rate has increased for all brackets this year. Varying from a 40p to £1 increase. The following rates will be applicable from 1st April 2023.

It’s important you take note of these rates and apply them to your employees payroll from 1st April 2023.

It’s important you take note of these rates and apply them to your employees payroll from 1st April 2023.

Income Tax

The amount of tax you need to deduct from your employees wages depends on how much they earn. These are the brackets set by the government along with the rates of tax that they must pay.

Emergency tax codes from April 2023 are as follows:

1257L W1
1257L M1
1257L X

National Insurance

Here are the National Insurance thresholds from April 2023

The amount you should deduct from your employees depends on the above thresholds. If an employee is at or below the lower earning limits then no national insurance should be deducted. If they fall in any of the other categories the following rates apply form April:

Employee Contributions

As well as remembering how much and when to pay your employees, you’ve also got to remember to pay HMRC your employer contributions.

As an employer you also need to make contributions as per below, please note if an employee is at or below the lower earning limit no contributions are required.

Employer Contributions

For further information about payroll rates for 2023-2024 visit the government website – Rates and thresholds for employers 2023 to 2024 – GOV.UK.

Running your own payroll can be tricky, especially as you have to be sure you’re paying both your employees and HMRC the correct amount. If you’re worried about running payroll, why not outsource? We can take the stress away of payment deadlines and you can be sure you’re paying both your employees and HMRC correctly.

>>>find out more at https://www.cactusbookkeeping.uk or book a discovery call using the link below

Book a discovery call

← Previous Post Next Post →

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

Are your PAYE payments reaching the right place?

Sep 28, 2022 | Payroll

Are your PAYE payments reaching the right place?

Have you ever received a letter chasing for payment of your PAYE when you know you have paid it?

When making PAYE payments, it is vital that your 13-character Accounts Office reference number is shown, or your payments may not be recognised and will languish indefinitely in a black hole until you ring and claim it.

If you are paying on time, you just need to quote your 13-character Accounts Office reference, this can be found on:

the letter HMRC sent you when you first registered as an employer
if you use a payment book, it is shown on the front of the booklet
your business tax account if you have added Employer PAYE enrolment to it
your payroll software
speak to your PAYE agent is someone runs your payroll for you

What to do if you pay monthly but are late making your payment

If you are not paying the current period, you need to add 4 extra characters onto the end of your reference. These final 4 characters will show the year and month/quarter your payment is for this will make the reference 17 characters.

Example: for the tax year 2022/23 you are late paying 6 May to 5 June (Mth 2), your reference would be your 13-digit reference plus 2302 i.e., 111AB000000002302 (ref for example only)

As each tax period has a different payment reference number, if you have more than one payment to make, make two separate payments using the correct reference.

Tax Periods

6 Apr to 5 May, use 01
6 May to 5 Jun, use 02
6 Jun to 5Jul, use 03
6 Jul to 5 Aug, use 04
6 Aug to 5 Sept, use 05
6 Sept to 5 Oct, use 06
6 Oct to 5 Nov, use 07
6 Nov to 5 Dec, use 08
6 Dec to 5 Jan, use 09
6 Jan to 5 Feb, use 10
6 Feb to 5 Mar, use 11
6 Mar to 5 Apr, use 12

What to do if you pay quarterly but are late making your payment

The same applies as above, except you will need to quote the tax year and the relevant quarter number as follows:

6 Apr to 5 Jul, use 03
6 Jul to 5 Oct, use 06
6 Oct to 5 Jan, use 09
6 Jan to 5 Apr, use 12

Example: for the tax year 2022/23 you are late paying quarter end 5 October 2022 (Qtr 2), your reference would be your 13-digit reference plus 2306 – i.e., 111AB000000002306 (ref for example only)

Do not fall foul of accruing interest payments for payments you have already made. Use the correct reference and save yourself a whole lot of hassle trying to sort it out.

Book a discovery call

← Previous Post Next Post →

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

Minimum Wage, Statutory Pay and Deduction Thresholds 2022-23

Apr 2, 2022 | All Categories, National Minimum Wage, Payroll

Minimum Wage, Statutory Pay and Deduction Thresholds 2022-23

Minimum Wage Rates

The rates change on 1^st April each year and the hourly rate for the minimum wage depends on your age and whether you are an apprentice.

You must be at least:

school leaving age to get the National Minimum Wage
aged 23 to get the National Living Wage – the minimum wage will still apply for workers aged 22 and under

✻ National Living Wage (aged 23 and over) has increased 6.60% to £9.50 per hour

✻ 21 to 22 will receive a 9.80% rise to £9.18 per hour

✻ 18 to 20 will receive a 4.10% rise to £6.83 per hour

✻ Under 18’s will receive a 4.10% increase to £4.81 per hour

✻ Apprentices will receive a 11.90% rise to £4.81 per hour**

Apprentices are entitled to the apprentice rate if they are:

aged under 19
aged 19 or over and in the first year of their apprenticeship

Example – An apprentice aged 21 in the first year of their apprenticeship is entitled to a minimum hourly rate of £4.81.

Apprentices are entitled to the minimum wage for their age if they both:

are aged 19 or over
have completed the first year of their apprenticeship

Example – An apprentice aged 21 who has completed the first year of their apprenticeship is entitled to a minimum hourly rate of £9.18.

Statutory Pay Rates

Statutory Sick Pay (SSP) is £99.35 per week, with the amount due based on the number of working days in the week.

Statutory Maternity Pay (SMP) and Statutory Adoption Pay (SAP) remains the same at 90% of the employee’s average weekly earnings (AWE) for the first 6 weeks. The statutory weekly rate for all weeks after this will be the lower of 90% of AWE or £156.66.

Statutory Paternity Pay (SPP), Statutory Shared Parental Pay (ShPP) and Statutory Parental Bereavement Pay (SPBP) all have the same weekly rate of £156.66 or 90% of AWE, whichever is lower.

PAYE Rates

Personal Allowance is £12,570 for the year. Employees can earn £1,048 monthly or £242 weekly free of tax

The standard tax code is 1257L

20% tax is due on earnings between £12,571 and £37,700 per year

40% tax is due on earnings between £37,701 and £150,000 per year

45% tax is due on earnings in excess of £150,000 per year

NIC Rates

Employer National Insurance contributions at 15.05% (including 1.25% increase for social care) are due on employee’s earnings over £9,100 per annum, £758 per month or £175 per week

No Employer NI contributions are due on earnings of apprentices under 25, employees aged under 21, or veterans of the Armed Forces in the first 12 months of their civilian employment

Employee National Insurance contributions at 13.25% (including 1.25% increase for social care) are due on their earnings over £9,880 per annum, £823 per month or £190 per week

If you require any further assistance with payroll and compliance, please get in touch via https://www.cactusbookkeeping.uk/contact/

Book a discovery call

← Previous Post Next Post →

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call