NATIONAL LIVING & MINIMUM WAGE RATES INCREASES
The new rates from April 1st 2026 are:
National Living Wage (Aged 21 and over) – £12.71 per hour
The new National Minimum Wage rates are going up to:
More details can be found at: www.gov.uk/national-minimum-wage-rates
TAX
The Annual Personal Allowance for tax purposes remains at £12,570.
The “normal” / Emergency Tax Code remains as 1257L.
Employees on the “normal” coding can earn £1,048 per month / £242 per week before they will pay any tax.
The PAYE tax rates are:
|
Rate |
Tax % |
Earnings Thresholds |
|
Basic |
20% |
Up to £37,700 |
|
Higher |
40% |
£37,701 – £125,140 |
|
Additional |
45% |
Above £125,140 |
NATIONAL INSURANCE
The Lower Earnings Limit (the amount at which Employees are entitled to some statutory payments) is now: £129 per week / £559 per month
The National Insurance thresholds remain as follows:
Employers Contributions
Employer NI is 15% on earnings above: £96 per week / £417 per month / £5,000 per annum
Employees Contributions
Employee NI is 8% on earnings between £12,570 and £50,270 and 2% on earnings above £50,270
Contributions begin on earnings above £242 per week / £1,048 per month
There is still no Employer National Insurance due for employees under 21 (or under 25 if they are an Apprentice) as long as they earn less than £967 per week / £4,189 per month
STUDENT LOANS
Plan 1 – For students who started their course pre 1st September 2012, the threshold is:
Plan 2 – For students who started their Higher Education course after 1st September 2012, the threshold remains at:
Plan 4 – For students who took loans out in Scotland:
Plan 5 – For students who started their undergraduate course in England from 1st August 2023 onwards. The threshold for Plan 5 is:
Postgraduate Loans – The threshold remains at:
Repayments are normally 9% of earnings above the threshold for Plans 1, 2, 4 and 5, and 6% for Postgraduate Loans.
EMPLOYMENT ALLOWANCE
Eligibility for Employment Allowance remains the same for the 2026–2027 tax year.
Eligible employers can claim up to £10,500 against their Employer National Insurance liability.
As we move into the new tax year, we will continue to carry out our validation checks and will claim Employment Allowance and Small Employer’s Relief on your behalf where you still meet the qualifying criteria.
Please note that some eligibility requirements fall outside of our visibility. Therefore, if there have been any changes to your circumstances, for example, if you have become part of connected companies, please let us know so we can ensure the correct treatment.