Guideline to Statutory Payroll Changes
| National Insurance Contributions Effective 6 April 2008 |
| The earnings threshold has increased for Employees and Employers NIC from £100.00 per week to £105.00 per week. This is the amount you can earn before paying National Insurance. There has been no change in the rate of National Insurance which remains at 11% for earnings between £105.00 and £770.00 per week. Earnings over £770.00 remains at 1%. Employers National Insurance remains at 12.8% over the earnings threshold of £105.00 per week. |
| Statutory Maternity and Paternity Pay 6 April 2008 |
| The statutory rate increases from £112.75 to £117.18 per week. The first six weeks of maternity pay remains at 90% of an employees average weekly earnings. There is no change to the amount of SMP/SPP that can be reclaimed. This remains at 92% unless you qualify for small employers relief. |
| Statutory Sick Pay 6 April 2008 |
| The statutory rate increases from £72.55 to £75.40 per week. |
| Useful Websites |
| Inland Revenue www.hmrc.gov.uk Maternity and Paternity Rights www.direct.gov.uk Department of Trade and Industry www.dti.gov.uk ACAS www.acas.co.uk |
| Personal Allowances Effective 6 April 2008 | ||
| The standard personal allowance increases from £5,225 to £5,435. The tax code will be 543L. The Chancellor has anounced that the new basic rate of tax will be 20% (down from 22%). The 10% tax band will no longer exist. Please see the example below of how tax will be calculated at 20% after the tax free allowance has been deducted. |
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| 2007/2008 Rates | 2008/2009 Rates | |
| Salary for the month | £1,800.00 | £1,800.00 |
| Less Personal allowance | £(435.00) | £(452.91) |
| Taxable | £1,365.00 | £1,347.09 |
| £185.33 @ 10% £18.53 | ||
| £1,179.67 @ 22% £259.53 | £1,347.09 @ 20% £269.42 | |
| Tax Due £278.06 | Tax Due £269.42 | |
| Statutory Redundancy Pay Effective 1 February 2008 |
| From 1st February the weekly rate of statutory redundancy pay will increase from £320.00 to £330.00 per week. |
| Payments After Leaving |
| If you make a payment after leaving to an employee a further P45 will not be issued. The payment will be recorded on the end of year return form P14. The employer can provide the employee with a letter detailing the payment made. A draft letter is available to download on our website www.paycheck.co.uk on the 'download' page. |