Payroll – what’s new for 2019/2020?

The new rates and allowances for the 2019/2020 tax year have been released. Here is a brief overview of the changes for the upcoming tax year.


The Employee Personal Allowance is increasing to £12500.00. Therefore, the emergency tax code will be 1250L. All tax codes with an L suffix need to be increased by 65 after the 6th April 2019. For all other tax codes a P9 notice will be issued by HMRC.

PAYE tax rates and thresholds2019 to 2020
Employee personal allowance£241 per week
£1042 per month
£12,500 per year
UK basic tax rate20% on annual earnings above the Tax Free Allowance amount and up to £37,500
UK higher tax rate40% on annual earnings from £37,501 to £150,000
UK additional tax rate45% on annual earnings above £150,000

National Insurance

The percentage rates have not changed from the 2017/2018 tax year. However some of the earnings limits and thresholds have.

Class 1 National Insurance thresholds2019 to 2020
LEL£118 per week
£512 per month
£6,136 per year
Primary Threshold (PT) – Employees start to pay NI contributions£166 per week
£719 per month
£8,632 per year
Secondary Threshold (ST) – Employers start to pay NI contributions£166 per week
£719 per month
£8,632 per year
Upper Secondary Threshold (under 21) (UST)£962 per week
£4,167 per month
£50,000 per year
Apprentice Upper Secondary Threshold (apprentice under 25) (AUST)£962 per week
£4,167 per month
£50,000 per year
Upper Earnings Limit (UEL)£962 per week
£4,167 per month
£50,000 per year

Employment Allowance

This allowance remains at £3000. If this allowance was claimed in the 2018/2019 tax year it will automatically be claimed for the 2019/2020 tax year unless HMRC are advised otherwise. The allowance does not apply if the sole employee is a Director.

Statutory Payments

The Statutory Sick Pay rate is increasing to £94.25 per week. This rate applies to sickness from the 6th April 2019. Statutory Sick Pay can no longer be recovered by the Employer.

Statutory Maternity Pay, Statutory Adoption Pay and Statutory Paternity Pay rate for 2019/2020 will be £148.68. This rate applies for any pay weeks on or commencing after the 1st April 2019.

The Shared Parental Pay rate is also set at £148.68.

The rate of recovery on Statutory Payments for Parents remains at 92%, or 103% for employers who previous year’s Class 1 National Insurance amount is £45,000 or less.


The National Living Wage and National Minimum Wage rates will increase on the 6th April 2019.

   25 and over 21 to 24 18 to 20 16 to 17  Apprentice
April 2019£8.21£7.70£6.15£4.35£3.90

Student Loans

The threshold for Plan 1 will rise to £18,935, and the threshold for Plan 2 £25,725.

Postgraduate Loan

The threshold for Postgraduate loans is £21,000. A total of 6% of income above the payment threshold will be deducted.

If you have any questions regarding the new rates and allowances for the 2019/2020 tax year then please contact Emma Mahoney, or alternatively phone 01772 840414 to speak to our Payroll team.