Are you wondering about the tax rates and thresholds for the 2024/25 tax year? This guide covers everything you need to know, including income tax rates, National Insurance contributions, National Minimum Wage, and statutory payments. Read on for detailed breakdowns and examples to help you understand the payroll regulations for 2024/25
Income Tax Rates (2024/25)
If you're earning within different income bands, it’s important to understand the tax rates and thresholds for the 2024/25 tax year to ensure you're complying with the latest regulations.
| Income Band | Tax Rate |
|---|---|
| Up to £12,570 | 0% (Personal Allowance) |
| £12,571 to £50,270 | 20% (Basic Rate) |
| £50,271 to £125,140 | 40% (Higher Rate) |
| Over £125,140 | 45% (Additional Rate) |
Example:
If you earn £80,000, your taxable income after the personal allowance of £12,570 is £67,430. The tax breakdown is:
- £37,700 taxed at 20% = £7,540
- £29,730 taxed at 40% = £11,892
Total tax = £7,540 + £11,892 = £19,432
For more details, visit the official GOV.UK Income Tax Rates page.
National Insurance Contributions (2024/25)
| Weekly Earnings | Employee Rate / Employer Rate |
|---|---|
| Up to £242 | 0% / 0% |
| £242.01 to £967 | 8% / 13.8% |
| Over £967 | 2% / 13.8% |
Example:
If you earn £1,200 per week, your National Insurance is calculated as follows:
- First £242 is not subject to NICs
- £725 (i.e., £967 - £242) is taxed at 8% = £58
- £233 (i.e., £1,200 - £967) is taxed at 2% = £4.66
Total NIC = £58 + £4.66 = £62.66
For official guidance, visit GOV.UK National Insurance Contributions.
National Minimum Wage and Living Wage Rates (2024/25)
The tax rates and thresholds for the 2024/25 tax year affect not only income tax but also the minimum wage and living wage regulations. Here’s what you need to know...
| Category of Worker | Hourly Rate |
|---|---|
| Aged 21 and over (National Living Wage) | £11.44 |
| Aged 18 to 20 inclusive | £8.60 |
| Aged under 18 (above compulsory school age) | £6.40 |
| Apprentices under 19 | £6.40 |
| Apprentices aged 19 or over (in the first year) | £6.40 |
Example:
An apprentice aged 18 working 40 hours per week will earn:
- 40 hours x £6.40 = £256 per week
Checkout our guide on the national minimum wage and get tips to stay compliant
Statutory Payments (2024/25)
| Type of Payment | Amount |
|---|---|
| Statutory Maternity Pay (first 6 weeks) | 90% of weekly earnings |
| Statutory Maternity Pay (after 6 weeks) | £184.03 or 90% of earnings, whichever is lower |
| Statutory Paternity Pay | £184.03 or 90% of earnings, whichever is lower |
| Statutory Adoption Pay | Same as Statutory Maternity Pay |
| Statutory Sick Pay | £109.40 per week |
| Statutory Parental Bereavement Pay | £184.03 per week |
Example:
If your weekly earnings are £300, your Statutory Maternity Pay for the first 6 weeks will be:
- 90% of £300 = £270 per week for the first 6 weeks. After 6 weeks, you will receive £184.03 per week.
For statutory payment details, visit the GOV.UK Statutory Payments page.
Additional Payroll Resources
For more detailed payroll guidance and compliance tips, check out our Payroll Compliance Guide. You can also learn about the benefits of salary sacrifice in our comprehensive Salary Sacrifice Guide.
FAQs
Income Tax FAQs
Q: What is the Personal Allowance?
A: The Personal Allowance is the amount of income you can earn before paying tax. For 2024/25, it is £12,570.
National Insurance FAQs
Q: What is the National Insurance threshold?
A: The threshold for employees is £242 per week for the 2024/25 tax year. You do not pay NICs on earnings below this.
National Minimum Wage FAQs
Q: What is the National Living Wage?
A: The National Living Wage is the minimum hourly rate for workers aged 21 and over. For 2024/25, it is £11.44 per hour.
Statutory Payments FAQs
Q: How is Statutory Maternity Pay calculated?
A: For the first 6 weeks, Statutory Maternity Pay is 90% of your average weekly earnings. After that, it is £184.03 per week or 90% of your earnings, whichever is lower.
Need More Help?
If you're still unsure about any of the tax rates or payments, or need further assistance with payroll, feel free to contact us for expert advice on managing payroll compliance and staying on top of changes.
