Tax Rates and Thresholds for 2020-21
The new Government Rates for the Tax Year 2020-21.
|Tax brackets||Gross per week||Description|
|Lower Earnings Limit||£120 gross per week or less||If you pay your employee the LEL or below, there is nothing due to HMRC and your employee will not be entitled to any state pensions or benefits.|
|Bracket between Lower Earnings Limit and NI Threshold||Between £120 - £169 gross per week||If you pay your employee between these figures there is nothing due to HMRC, however you should still register so your employee will be entitled to state pension and benefits.|
|Employer's (Secondary) NI Threshold||£169 gross per week or more||If you pay your employee £169 or more you must register and pay Employer’s NI.|
|Employee's (Primary) NI Threshold||£183 gross per week or more||If you pay your employee £183 or more you must now deduct National Insurance on behalf of your employee, as well as pay Employer’s NI.|
|Tax Threshold||Over £240 gross per week||If you pay your employee £240 or more you must now also deduct tax on from your employee.|
Tax and NI Payments
If your Tax and NI bill is below £1,500 per month you will have to pay the Tax and NI to HMRC on a quarterly basis. Be aware that late payments can result in hefty fines and interest being applied.
If your monthly liability bill exceeds £1,500 per month, you must pay HMRC every month.
|Payment Deadlines||Financial Quarter||Months Covered|
|19th Jan||4||Oct, Nov, Dec|
|19th April||1||Jan, Feb, Mar|
|19th July||2||April, May, Jun|
|19th Oct||3||Jul, Aug, Sep|
National Minimum Wage (NMW)
*The National Minimum Wage (under 24) changes every October, the National Living Wage (25+) changes every April.
|Age||Gross per hour|
|Offset Allowance||£57.40 per 7-day week|
Below is a table that illustrates the minimum percentage of the employee's pay that an employer, an employee and the government will have to contribute this financial year.
|6th April 2020 - 5th April 2021||3%||4%||1%||8%|
Statutory Maternity Pay (SMP)
The first 6 weeks of SMP are paid at 90% of average gross weekly earnings. The remaining weeks of the maternity pay period (up to a maximum of 33 weeks) are paid at the current SMP rate of £151.20 gross per week (for the 20-21 tax year), or 90% of the employee's weekly earnings, whichever is lower.
Statutory Sick Pay (SSP)
The 2020-21 rate of SSP is £95.85 gross per week. The first 3 consecutive days of illness are unpaid as SSP starts on the fourth consecutive day of illness and can be paid for up to 28 weeks.