Government Rates & Thresholds 20/21
|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 in respect of NI. This means the employee will not be contributing towards their NI record which can affect their eligibility to a state pension or benefits.|
|Bracket between Lower Earnings Limit and NI Threshold||£120 – £169 gross per week||If you pay your employee between these figures there is nothing due to HMRC in respect of NI.|
|Employer’s (Secondary) NI Threshold||£169 gross per week or more||If you pay your employee £169 or more and they are on a standard NI code, there will not be an Employee NI deduction, but Employer NI will be due|
|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||Based on the standard tax free allowance for this year of £12,500, if you pay your employee £240 or more you must now also deduct tax 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 January||3||Oct, Nov, Dec|
|19th April||4||Jan, Feb, Mar|
|19th July||1||Apr, May, Jun|
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|
|Age 18 – 20||£6.45|
|Age 21 – 24||£8.20|
|Offset Allowance||£57.40 per 7 day week|
|6th April 2020 – 5th April 2021||3%||4%||1%||
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, 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.
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