Tax and National Insurance thresholds are updated at the start of the new tax year

The following tax and national insurance thresholds apply from 6th April 2018

Employees can earn £11,850 before tax

A personal tax free allowance of £11,850 translates into a tax code of 1185L.  The majority of employees will be on this tax code unless they have been issued different code by HMRC

Each employee is allowed to earn tax free;
  • £228 per week
  • £988 per month
  • £11,850 per year

Once the personal allowance has been used tax is deductible on all earnings above £11,850 at a rate of 20% up to the higher rate threshold of £34,500

Above £34,501 a higher rate of tax at 40% is applied to earnings up to £150,000

For all earnings above £150,000 an additional rate of 45% is applied.

National Insurance Thresholds

Employees can earn £162 a week before any liability to primary national insurance contributions are due.

Employer’s secondary national insurance contributions start when the employee’s earnings reach £162 a week, except for employee’s under 21 and apprentices under 25. For these two groups the employer will not contribute until the upper earnings level is reached £892 per week.

 

 We provide free employer support to all our clients