Tax rates and thresholds 2024 to 2025
These are a guide only and will be updated during the year as more information gets released from HMRC. Most have now been confirmed and a note has been added to any sections that have not been.
Updated 6th March 2024 – Employee Primary Threshold NI Rate changed from 10% to 8% and Married women’s reduced rate changed from 3.85% to 1.85%.
The following rates apply from 6th April 2024 until 5th April 2025 unless stated otherwise.
PAYE tax and Class 1 National Insurance Contributions
When you operate payroll through Shape, the software will work out the tax and national insurance contributions every time you pay your employees based on the below thresholds for 2024-2025 tax year.
Tax thresholds, rates and codes
The amount that is deducted from the employee is dependent on the employee’s tax code and how much they earn above their personal allowance.
England and Northern Ireland
The standard employee personal allowance for the 2024 to 2025 tax year is:
- £242 per week
- £1,048 per month
- £12,570 per year
| PAYE tax rate | Rate of tax | Annual earnings the rate applies to (above the PAYE threshold) |
|---|---|---|
| Basic tax rate | 20% | Up to £37,700 |
| Higher tax rate | 40% | From £37,701 to £125,140 |
| Additional tax rate | 45% | Above £125,140 |
Scotland
Subject to parliamentary approval
The standard employee personal allowance for the 2024 to 2025 tax year is:
- £242 per week
- £1,048 per month
- £12,570 per year
| PAYE tax rate | Rate of tax | Annual earnings the rate applies to (above the PAYE threshold) |
|---|---|---|
| Starter tax rate | 19% | Up to £2,306 |
| Basic tax rate | 20% | From £2,307 to £13,991 |
| Intermediate tax rate | 21% | From £13,992 to £31,092 |
| Higher tax rate | 42% | From £31,093 to £62,430 |
| Advanced tax rate | 45% | From £62,431 to £125,140 |
| Top tax rate | 48% | Above £125,141 |
Wales
Subject to parliamentary approval
The standard employee personal allowance for the 2024 to 2025 tax year is:
- £242 per week
- £1,048 per month
- £12,570 per year
| PAYE tax rate | Rate of tax | Annual earnings the rate applies to (above the PAYE threshold) |
|---|---|---|
| Basic tax rate | 20% | Up to £37,700 |
| Higher tax rate | 40% | From £37,701 to £125,140 |
| Additional tax rate | 45% | Above £125,140 |
Emergency tax codes
The emergency tax codes from 6 April 2024 are:
- 1257L W1
- 1257L M1
- 1257L X
More information on emergency tax codes.
Class 1 National Insurance Thresholds
National Insurance deductions are only made on earnings above the lower earnings limit.
| Class 1 National Insurance thresholds | 2024 to 2025 |
|---|---|
| Lower earnings limit | £123 per week £533 per month £6,396 per year |
| Primary threshold | £242 per week £1,048 per month £12,570 per year |
| Secondary threshold | £175 per week £758 per month £9,100 per year |
| Freeport upper secondary threshold | £481 per week £2,083 per month £25,000 per year |
| Upper secondary threshold (under 21) | £967 per week £4,189 per month £50,270 per year |
| Apprentice upper secondary threshold (apprentice under 25) | £967 per week £4,189 per month £50,270 per year |
| Veterans’ upper secondary threshold | £967 per week £4,189 per month £50,270 per year |
| Upper earnings limit | £967 per week £4,189 per month £50,270 per year |
Class 1 National Insurance Rates
Employee (primary) contribution rates
| National Insurance category letter | Earnings at or above the lower earnings limit up to and including the primary threshold | Earnings above the primary threshold up to and including the upper earnings limit | Balance of earnings above the upper earnings limit |
|---|---|---|---|
| A | 0% | 8% | 2% |
| B | 0% | 1.85% | 2% |
| C | nil | nil | nil |
| D (Investment Zone Deferment) | 0% | 2% | 2% |
| E (Investment Zone MWRRE) | 0% | 3.85% | 2% |
| F (Freeport) | 0% | 10% | 2% |
| H (apprentice under 25) | 0% | 10% | 2% |
| I (Freeport — married women and widows reduced rate) | 0% | 1.85% | 2% |
| J (Deferment) | 0% | 2% | 2% |
| K (Investment Zone over state pension age) | nil | nil | nil |
| L (Freeport — deferment) | 0% | 2% | 2% |
| M (under 21) | 0% | 10% | 2% |
| N (Investment Zone Standard) | 0% | 10% | 2% |
| S (Freeport — over state pension age) | nil | nil | nil |
| V (veteran) | 0% | 10% | 2% |
| Z (under 21 — deferment) | 0% | 2% | 2% |
Employer (secondary) contribution rates
| National Insurance category letter | Earnings at or above the lower earnings limit up to and including the secondary threshold | Earnings above the secondary threshold up to and including the Freeport and Investment Zone upper secondary threshold | Earnings above Freeport and Investment Zone upper secondary threshold up to and including upper earnings limit, upper secondary thresholds for under 21s, apprentices and veterans | Balance of earnings above upper earnings limit, upper secondary thresholds for under 21s, apprentices and veterans |
|---|---|---|---|---|
| A | 0% | 13.8% | 13.8% | 13.8% |
| B | 0% | 13.8% | 13.8% | 13.8% |
| C | 0% | 13.8% | 13.8% | 13.8% |
| D (Investment Zone Deferment) | 0% | 0% | 13.8% | 13.8% |
| E (Investment Zone MWRRE) | 0% | 0% | 13.8% | 13.8% |
| F (Freeport) | 0% | 0% | 13.8% | 13.8% |
| H (apprentice under 25) | 0% | 0% | 0% | 13.8% |
| I (Freeport — married women and widows reduced rate) | 0% | 0% | 13.8% | 13.8% |
| J (Deferment) | 0% | 13.8% | 13.8% | 13.8% |
| K (Investment Zone over state pension age) | 0% | 0% | 13.8% | 13.8% |
| L (Freeport — deferment) | 0% | 0% | 13.8% | 13.8% |
| M (under 21) | 0% | 0% | 0% | 13.8% |
| N (Investment Zone Standard) | 0% | 0% | 13.8% | 13.8% |
| S (Freeport — state pensioner) | 0% | 0% | 13.8% | 13.8% |
| V (veteran) | 0% | 0% | 0% | 13.8% |
| Z (under 21 — deferment) | 0% | 0% | 0% | 13.8% |
Class 1A National Insurance: expenses and benefits
The National Insurance Class 1A rate on expenses and benefits for 2024 to 2025 is 13.8%.
More information about expenses and benefits.
Class 1A National Insurance: termination awards and sporting testimonial payments
The National Insurance Class 1A rate on termination awards and sporting testimonial payments for 2024 to 2025 is 13.8%. More information on termination awards.
More information on sporting testimonials.
Pay employers’ Class 1A National Insurance.
Class 1B National Insurance: PAYE Settlement Agreements (PSAs)
The National Insurance Class 1B rate for 2024 to 2025 is 13.8%. More information on PAYE Settlement Agreement.
Pay Class 1B National Insurance.
National Minimum Wage
HMRC guide to national minimum wage. There is also a National Minumum Wage calculator that can be used to check if employees are being paid the correct amount.
These rates apply from 1 April 2024.
The national living wage has been changed to include those 21 and over.
| Category of worker | Hourly rate |
|---|---|
| Aged 21 and above (national living wage rate) | £11.44 |
| Aged 18 to 20 inclusive | £8.60 |
| Aged under 18 (but above compulsory school leaving age) | £6.40 |
| Apprentices aged under 19 | £6.40 |
| Apprentices aged 19 and over but in the first year of their apprenticeship | £6.40 |
Check previous years’ national minimum wage rates.
Statutory Maternity, Paternity, Adoption, Shared Parental and Parental Bereavement Pay
Use the maternity, adoption and paternity calculator for employers to work out your employee’s:
- Statutory Maternity Pay (SMP)
- paternity or adoption pay
- qualifying week
- average weekly earnings
- leave period
These rates apply from 7 April 2024.
| Type of payment or recovery | 2024 to 2025 rate |
|---|---|
| Statutory Maternity Pay — weekly rate for first 6 weeks | 90% of the employee’s average weekly earnings |
| Statutory Maternity Pay — weekly rate for remaining weeks | £184.03 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Paternity Pay (SPP ) — weekly rate | £184.03 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Adoption Pay (SAP ) — weekly rate for first 6 weeks | 90% of the employee’s average weekly earnings |
| Statutory Adoption Pay — weekly rate for remaining weeks | £184.03 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Shared Parental Pay (ShPP ) — weekly rate | £184.03 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Parental Bereavement Pay (SPBP ) — weekly rate | £184.03 or 90% of the employee’s average weekly earnings, whichever is lower |
| SMP, SPP, ShPP, SAP or SPBP —proportion of your payments you can recover from HMRC | 92% if your total Class 1 National Insurance (both employee and employer contributions) is above £45,000 for the previous tax year 103% if your total Class 1 National Insurance for the previous tax year is £45,000 or lower |
Statutory Sick Pay
The same weekly Statutory Sick Pay rate applies to all employees. However, the amount you must pay an employee for each day they’re off work due to illness (the daily rate) depends on the number of ‘qualifying days’ they work each week.
Use the Statutory Sick Pay calculator to work out your employee’s sick pay, or read how to work out your employee’s Statutory Sick Pay manually using these rates.
| Unrounded daily rates | Number of qualifying days in a 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 |
|---|---|---|---|---|---|---|---|---|
| £16.6785 | 7 | £16.68 | £33.36 | £50.04 | £66.72 | £83.40 | £100.08 | £116.75 |
| £19.4583 | 6 | £19.46 | £38.92 | £58.38 | £77.84 | £97.30 | £116.75 | — |
| £23.35 | 5 | £23.35 | £46.70 | £70.05 | £93.40 | £116.75 | — | — |
| £29.1875 | 4 | £29.19 | £58.38 | £87.57 | £116.75 | — | — | — |
| £38.9166 | 3 | £38.92 | £77.84 | £116.75 | — | — | — | — |
| £58.375 | 2 | £58.38 | £1116.75 | — | — | — | — | — |
| £116.75 | 1 | £116.75 | — | — | — | — | — | — |
Examples
| Employee works | Qualifying days in a week | Period of sickness | PIW | Number of waiting days | Number of days SSP is payable for | Total due for that week |
|---|---|---|---|---|---|---|
| Monday to Friday | 5 | 5 | 5 | 3 | 2 | £46.70 |
| Tuesday, Thursday, Friday | 3 | 3 | 0 | 0 | 0 | £0.00 |
| Tuesday, Wednesday, Thursday, Friday | 4 | 4 | 4 | 3 | 1 | £29.19 |
Student loan and postgraduate loan recovery
| Rate or threshold | 2024 to 2025 rate |
|---|---|
| Employee earnings threshold for student loan plan 1 | £24,990 per year £1,922.30 per month £480.57 per week |
| Employee earnings threshold for student loan plan 2 | £27,295 per year £2,274.58 per month £524.90 per week |
| Employee earnings threshold for student loan plan 4 | £31,395 per year £2,606.25 per month £603.75 per week |
| Student loan deductions | 9% |
| Employee earnings threshold for postgraduate loan Not confirmed yet | £21,000 per year £1,750 per month £403.84 per week |
| Postgraduate loan deductions | 6% |
Company cars: advisory fuel rates
Use advisory fuel rates to work out mileage costs if you provide company cars to your employees. Not confirmed yet
These rates apply from 1 March 2023.
| Engine size | Petrol — amount per mile | LPG — amount per mile |
|---|---|---|
| 1400cc or less | 13 pence | 10 pence |
| 1401cc to 2000cc | 15 pence | 11 pence |
| Over 2000cc | 23 pence | 17 pence |
| Engine size | Diesel — amount per mile |
|---|---|
| 1600cc or less | 13 pence |
| 1601cc to 2000cc | 15 pence |
| Over 2000cc | 20 pence |
Hybrid cars are treated as either petrol or diesel cars for this purpose.
Check advisory fuel rates for previous periods.
Advisory electricity rate for fully electric cars from 1 March 2023
Amount per mile: 9 pence.
Electricity is not a fuel for car fuel benefit purposes.
Employee vehicles: mileage allowance payments
Not confirmed yet
Find out more about reporting and paying mileage allowance payments.
| Type of vehicle | Rate per business mile 2023 to 2024 |
|---|---|
| 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 |
Employment Allowance
Employment Allowance allows eligible employers to reduce their annual National Insurance liability by up to the annual allowance amount.
| Allowance | 2024 to 2025 rate |
|---|---|
| Employment Allowance | £5,000 |
Apprenticeship Levy
Employers and connected companies with a total annual pay bill of more than £3 million are liable to the Apprenticeship Levy, which is payable monthly. Employers who are not connected to another company or charity will have an annual allowance that reduces the amount of Apprenticeship Levy you have to pay. Apprenticeship Levy is charged at a percentage of your annual pay bill.
| Allowance or charge | 2024 to 2025 rate |
|---|---|
| Apprenticeship Levy allowance | £15,000 |
| Apprenticeship Levy charge | 0.5% |
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