What are the rates for the National Minimum Wage?

The National Minimum Wage rates are revised annually in April.   Apprentice Under 18 18 to 20 21 to 24 25 & Over From April ‘17 £3.50 £4.05 £5.60 £7.05 £7.50   Apprentice rate applies if you are under 19, or over 19 and in the first year of your apprenticeship. Apprentices are paid minimum […]

What is a National Insurance number?

A National Insurance number or NI number is a unique number that ensures your tax and NI contributions are logged against your name only.

What should a payslip contain?

A payslip should contain the following: Gross pay (i.e. pay before any deductions, such as tax and National Insurance). Tax deducted. National Insurance deducted. Other deductions e.g. student loan repayments. Net pay (i.e. pay after all deductions). How it will be paid.

What is a P60?

A P60 summarises your pay, tax and National Insurance for the tax year. Employers must provide them to employees by 31st May after the end of the tax year (i.e. 5th April).

How do I calculate a staff member’s income tax?

The first £11,500 is tax free, this is called the Personal Allowance. Any earnings over £11,500 up to £45,000 are taxed at 20%. Earnings over £45,000 and up to £150,000 are taxed at 40%. Earnings over £150,000 are taxed at £45%. Don’t forget that the employee must also pay National Insurance. Employees 12% on earnings […]

What is PAYE?

PAYE stands for Pay As You Earn. It is the system whereby employers withhold the tax and national insurance you owe on your earnings and pay it directly to HMRC.

When should a business pay National Insurance?

A business should pay both employers and employees National Insurance on wages and salaries above the threshold (figures shown below are for the 17-18 tax year). Employees 12% on earnings above £157 per week, up to £866 per week. 2% on earnings above £866 per week. Employers 13.8% on earnings above £157 per week. These […]

What is National Insurance?

National Insurance is tax paid by employers, employees, and the self-employed. It funds state pensions, sick pay, unemployment benefits, maternity allowance and bereavement benefits. Class 1 – Paid by employees earning more than £157 per week. Class 1A and 1B – Paid by employers on employee expenses and benefits. Class 2 – Paid by self-employed […]

How do I calculate student loan repayments?

If you are a Plan 2, e.g. an English or Welsh student who started their course on or after 1st September 2012: You need to start repaying your loan when your annual income exceeds £21,000. The repayments are 9% of your income over the £21,000. Interest is charged on the outstanding amount but you can […]

When should I register for PAYE?

You need to start registering for PAYE as soon as you intend to start paying yourself or your employees. It can take up to two weeks to register and you must be registered by the first payday.