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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 HMRC can collect Income Tax and National Insurance from your employees.

Your payroll software will calculate how much tax and National Insurance to deduct from your employees鈥� pay.

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	拢221 per week 拢958 per month 拢11,500 per year
UK basic tax rate	20% on annual earnings above the PAYE tax threshold and up to 拢33,500
UK higher tax rate	40% on annual earnings from 拢33,501 to 拢150,000
UK additional tax rate	45% on annual earnings above 拢150,000
Scottish basic tax rate	20% on annual earnings above the PAYE tax threshold and up to 拢31,500
Scottish higher tax rate	40% on annual earnings from 拢31,501 to 拢150,000
Scottish additional tax rate	45% on annual earnings above 拢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)	拢113 per week 拢490 per month 拢5,876 per year
Primary Threshold (PT)	拢157 per week 拢680 per month 拢8,164 per year
Secondary Threshold (ST)	拢157 per week 拢680 per month 拢8,164 per year
Upper Secondary Threshold (under 21) (UST)	拢866 per week 拢3,750 per month 拢45,000 per year
Apprentice Upper Secondary Threshold (apprentice under 25) (AUST)	拢866 per week 拢3,750 per month 拢45,000 per year
Upper Earnings Limit (UEL)	拢866 per week 拢3,750 per month 拢45,000 per year

Class 1 National Insurance rates

Employee (primary) contribution rates

Deduct primary contributions (employee鈥檚 National Insurance) from your employees鈥� 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 鈥� deferment)	0%	2%	2%

Employer (secondary) contribution rates

You pay secondary contributions (employer鈥檚 National Insurance) to HMRC as part of your PAYE bill.

Pay employers鈥� PAYE tax and National Insurance.

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 鈥� 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.

National Insurance class	2017 to 2018 rate
Class 1A	13.8%

Pay employers鈥� Class 1A National Insurance.

Class 1B National Insurance: PAYE Settlement Agreements (PSAs)

You pay Class 1B National Insurance if you have a PSA. This allows you to make one annual payment to cover all the tax and National Insurance due on small or irregular taxable expenses or benefits for your employees.

National Insurance class	2017 to 2018 rate
Class 1B	13.8%

Pay Class 1B National Insurance.

National Minimum Wage

The National Minimum Wage is the minimum pay per hour almost all workers are entitled to by law. Use the National Minimum Wage calculator to check if you鈥檙e paying a worker the National Minimum Wage or if you owe them payments from past years.

These rates apply from 1 April 2017.

Category of worker	Hourly rate
Aged 25 and above (National Living Wage rate)	拢7.50
Aged 21 to 24 inclusive	拢7.05
Aged 18 to 20 inclusive	拢5.60
Aged under 18 (but above compulsory school leaving age)	拢4.05
Apprentices aged under 19	拢3.50
Apprentices aged 19 and over, but in the first year of their apprenticeship	拢3.50

See National Minimum Wage rates for previous years.

Statutory maternity, paternity, adoption and shared parental pay

Use the maternity and paternity calculator for employers to calculate your employee鈥檚 Statutory Maternity Pay (SMP), paternity or adoption pay, their qualifying week, average weekly earnings and leave period.

Type of payment or recovery	2017 to 2018 rate
SMP 鈥� weekly rate for first 6 weeks	90% of the employee鈥檚 average weekly earnings
SMP 鈥� weekly rate for remaining weeks	拢140.98 or 90% of the employee鈥檚 average weekly earnings, whichever is lower
Statutory Paternity Pay (SPP) 鈥� weekly rate	拢140.98 or 90% of the employee鈥檚 average weekly earnings, whichever is lower
Statutory Adoption Pay (SAP) 鈥� weekly rate for first 6 weeks	90% of employee鈥檚 average weekly earnings
SAP 鈥� weekly rate for remaining weeks	拢140.98 or 90% of the employee鈥檚 average weekly earnings, whichever is lower
Statutory Shared Parental Pay (ShPP) 鈥� weekly rate	拢140.98 or 90% of the employee鈥檚 average weekly earnings, whichever is lower
SMP, SPP, ShPP, SAP 鈥� proportion of your payments you can recover from HMRC	92% if your total Class 1 National Insurance (both employee and employer contributions) is above 拢45,000 for the previous tax year 103% if your total Class 1 National Insurance for the previous tax year is 拢45,000 or lower

Statutory Sick Pay (SSP)

The same weekly SSP rate applies to all employees. However, the amount you must actually pay an employee for each day they鈥檙e off work due to illness (the daily rate) depends on the number of 鈥榪ualifying days鈥� (QDs) they work each week.

Use the SSP calculator to work out your employee鈥檚 sick pay, or use the following rates.

Unrounded daily rates	Number of QDs in week	1 day to pay	2 days to pay	3 days to pay	4 days to pay	5 days to pay	6 days to pay	7 days to pay
拢12.7642	7	拢12.77	拢25.53	拢38.30	拢51.06	拢63.83	拢76.59	拢89.35
拢14.8916	6	拢14.90	拢29.79	拢44.68	拢59.57	拢74.46	拢89.35	听
拢17.8700	5	拢17.87	拢35.74	拢53.61	拢71.48	拢89.35	听	听
拢22.3375	4	拢22.34	拢44.68	拢67.02	拢89.35	听	听	听
拢29.7833	3	拢29.79	拢59.57	拢89.35	听	听	听	听
拢44.6750	2	拢44.68	拢89.35	听	听	听	听	听
拢89.3500	1	拢89.35	听	听	听	听	听	听

Student loan recovery

If your employees鈥� earnings are above the earnings threshold, record their student loan deductions in your payroll software. It will automatically calculate and deduct repayments from their pay.

Rate or threshold	2017 to 2018 rate
Employee earnings threshold for Plan 1	拢17,775 per year 拢1,481 per month 拢341 per week
Employee earnings threshold for Plan 2	拢21,000 per year 拢1,750 per month 拢403 per week
Student loan deductions	9%

Company cars: Advisory Fuel Rates (AFRs)

Use AFRs to work out mileage costs if you provide company cars to your employees.

These rates apply from 1 March 2018.

Engine size	Petrol 鈥� amount per mile	LPG 鈥� amount per mile
1400cc or less	11 pence	7 pence
1401cc to 2000cc	14 pence	8 pence
Over 2000cc	22 pence	13 pence

Engine size	Diesel 鈥� amount per mile
1600cc or less	9 pence
1601cc to 2000cc	11 pence
Over 2000cc	13 pence

Hybrid cars are treated as either petrol or diesel cars for this purpose.

Employee vehicles: Mileage Allowance Payments (MAPs)

MAPs are what you pay your employees for using their own vehicle for business journeys.

You can pay your employees an approved amount of MAPs each year without having to report them to HMRC. To work out the approved amount, multiply your employee鈥檚 business travel miles for the year by the rate per mile for their vehicle.

Find out more about reporting and paying MAPs.

Type of vehicle	Rate per business mile 2017 to 2018
Car	For tax purposes: 45 pence for the first 10,000 business miles in a tax year, then 25 pence for each subsequent mile For National Insurance purposes: 45 pence for all business miles
Motorcycle	24 pence for both tax and National Insurance purposes and for all business miles
Cycle	20 pence for both tax and National Insurance purposes and for all business miles