Statutory Payroll Changes for 2010/2011
The personal allowance and tax bands remain the same for 2010/2011. The personal allowance is 647L. However the Chancellor has introduced a new rate of tax of 50% for income over £150,000.
The tax bands for 2010/11 are as follows
Basic Rate 0 - £37,400 20%
Higher Rate £37,401 to £150,000 40%
Additional Rate more than £150,000 50%
As well as the new 50% tax band for higher rate tax payers employees earning £100,000 and above will have their personal allowance reduced by £2.00 for every £1.00 of income. This means for any employee earning over £113,000 their personal allowance will be reduced to nil. The Revenue will be issuing new notices of codings for 2010/2011 for employees earning over £100,000.
As an additional service
We are delighted to offer either:
1. A meeting to go through the specific implications for any of your employees earning over £100,000.
2. To recalculate the revised net pay figures for any employees earning over £100,000 based on the above statutory changes
If you are interested in either of these options please call Victoria or Sophie on 0207 498 1133 for a quote.
National Insurance Contributions effective 6 April 2010
There has been no change in rates for National Insurance. The earnings threshold remains at £110.00 per week. This is the amount you can earn before paying National Insurance. Employees National Insurance remains at 11% for earnings between £110.00 and £844.00 per week. Earnings over £844.00 are at 1%. Employers National Insurance remains at 12.8% on earnings over £110.00 per week.
Statutory Maternity Pay, Paternity Pay and Adoption Pay effective 6 April 2010
The first six weeks of maternity pay remains at 90% of employees average weekly earnings. The next 33 weeks is payable at the new rate of £124.88 a week (currently £123.06 a week). If an employees average weekly earnings are lower than the statutory amount they will receive the lower amount for 39 weeks. 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.
Changes to Women’s Retirement Age
State Retirement Age for women in increasing in phases from age 60 to 65 over a period of 10 years starting from 2010. By 2020 the state retirement age for women will be 65.
Employers should continue to deduct NIC until they receive an Age of Exemption Certificate from the employee.