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Rates and thresholds for employers 2017 to 2018
Rates and thresholds for employers 2017 to 2018
Unless otherwise stated, the figures quoted apply between 6 April 2017 and 5 April 2018.
PAYE tax and Class 1 National Insurance contributions
You normally operate PAYE as part of your payroll so HM Revenue and Customs (HMRC) can collect Income Tax and National Insurance from your employees.
Tax thresholds, rates and codes
The amount of Income Tax you deduct from your employees depends on their tax code and how much of their taxable income is above their Personal Allowance.
| PAYE tax rates, thresholds and codes | 2017 to 2018 |
|---|---|
| Employee personal allowance | £221 per week £958 per month £11,500 per year |
| UK Basic tax rate | 20% on annual earnings above the PAYE tax threshold and up to £33,500 |
| UK Higher tax rate | 40% on annual earnings from £33,501 to £150,000 |
| UK Additional tax rate | 45% on annual earnings above £150,000 |
| Scottish Basic tax rate | 20% on annual earnings above the PAYE tax threshold and up to £31,930 |
| Scottish Higher tax rate | 40% on annual earnings from £31,931 to £150,000 |
| Scottish Additional tax rate | 45% on annual earnings above £150,000 |
| Emergency tax codes | 1150L W1, 1150L M1 or 1150L X |
Class 1 National Insurance thresholds
You can only make National Insurance deductions on earnings above the Lower Earnings Limit (LEL).
| Class 1 National Insurance thresholds | 2017 to 2018 |
|---|---|
| Lower Earnings Limit (LEL) | £113 per week £490 per month £5,876 per year |
| Primary Threshold (PT) | £157 per week £680 per month £8,164 per year |
| Secondary Threshold (ST) | £157 per week £680 per month £8,164 per year |
| Upper Secondary Threshold (under 21) (UST) | £866 per week £3,750 per month £45,000 per year |
| Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) | £866 per week £3,750 per month £45,000 per year |
| Upper Earnings Limit (UEL) | £866 per week £3,750 per month £45,000 per year |
Class 1 National Insurance rates
Employee (primary) contribution rates
Deduct primary contributions (employee’s National Insurance) from your employees’ pay through PAYE.
| National Insurance 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
You pay secondary contributions (employer’s National Insurance) to HMRC as part of your PAYE bill.
| National Insurance 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
You must pay Class 1A National Insurance on work benefits you give to your employees, example a company mobile phone. You report and pay Class 1A at the end of each tax year.
| NI class | 2017 to 2018 rate |
|---|---|
| Class 1A | 13.8% |