This latest Three Counties Payroll blog rounds up key facts for the 2026 tax year. Further information is available at gov.uk
If you have any queries, please contact our team on 01905 622245.
Tax thresholds, rates and codes in England
The standard employee personal allowance for the 2025 to 2026 tax year is:
- £242 per week
- £1,048 per month
- £12,570 per year
| Class 1 National Insurance thresholds | 2025 to 2026 | |
| Lower earnings limit | £125 per week £542 per month £6,500 per year | |
| Primary threshold | £242 per week £1,048 per month £12,570 per year | |
| Secondary threshold | £96 per week £417 per month £5,000 per year | |
| Freeport upper secondary threshold | £481 per week £2,083 per month £25,000 per year | |
| Investment Zone 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
Deduct primary contributions (employee’s NI) from your employees’ pay through PAYE.
| National Insurance category letter | Earnings at or above lower earnings limit up to and including primary threshold | Earnings above primary threshold up to and including upper earnings limit | Balance of earnings above 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 — married women and widows reduced rate) | 0% | 1.85% | 2% |
| F (Freeport) | 0% | 8% | 2% |
| H (apprentice under 25) | 0% | 8% | 2% |
| I (Freeport — married women and widows reduced rate) | 0% | 1.85% | 2% |
| J | 0% | 2% | 2% |
| K (Investment Zone — state pensioner) | Nil | Nil | nil |
| L (Freeport — deferment) | 0% | 2% | 2% |
| M (under 21) | 0% | 8% | 2% |
| N (Investment Zone) | 0% | 8% | 2% |
| S (Freeport — state pensioner) | Nil | Nil | nil |
| V (veteran) | 0% | 8% | 2% |
| Z (under 21 — deferment) | 0% | 2% | 2% |
Employer (secondary) contribution rates
Secondary contributions (employer’s NI) are paid to HMRC as part of your PAYE bill.
| National Insurance category letter | Earnings above secondary threshold up to and including lower earnings limit | Earnings above lower earnings limit up to and including Freeport and Investment Zone upper secondary thresholds | Earnings above Freeport and Investment Zone upper secondary thresholds 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 | 15% | 15% | 15% | 15% |
| B | 15% | 15% | 15% | 15% |
| C | 15% | 15% | 15% | 15% |
| D (Investment Zone — deferment) | 0% | 0% | 15% | 15% |
| E (Investment Zone — married women and widows reduced rate) | 0% | 0% | 15% | 15% |
| F (Freeport) | 0% | 0% | 15% | 15% |
| H (apprentice under 25) | 0% | 0% | 0% | 15% |
| I (Freeport — married women and widows reduced rate) | 0% | 0% | 15% | 15% |
| J | 15% | 15% | 15% | 15% |
| K (Investment Zone — state pensioner) | 0% | 0% | 15% | 15% |
| L (Freeport — deferment) | 0% | 0% | 15% | 15% |
| M (under 21) | 0% | 0% | 0% | 15% |
| N (Investment Zone) | 0% | 0% | 15% | 15% |
| S (Freeport — state pensioner) | 0% | 0% | 15% | 15% |
| V (veteran) | 0% | 0% | 0% | 15% |
| Z (under 21 — deferment) | 0% | 0% | 0% | 15% |
National Minimum Wage
| Category of worker | Hourly rate |
| Aged 21 and above (national living wage rate) | £12.21 |
| Aged 18 to 20 inclusive | £10 |
| Aged under 18 (but above compulsory school leaving age) | £7.55 |
| Apprentices aged under 19 | £7.55 |
| Apprentices aged 19 and over, but in the first year of their apprenticeship | £7.55 |
Statutory Maternity, Paternity, Adoption, Shared Parental, Parental Bereavement and Neonatal Care Pay
| Type of payment or recovery | 2025 to 2026 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 | £187.18 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Paternity Pay (SPP) — weekly rate | £187.18 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 |
| SAP — weekly rate for remaining weeks | £187.18 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Shared Parental Pay (ShPP) — weekly rate | £187.18 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Parental Bereavement Pay (SPBP) — weekly rate | £187.18 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Neonatal Care Pay (SNCP) — weekly rate | £187.18 or 90% of the employee’s average weekly earnings, whichever is lower |
| SMP, SPP, ShPP, SAP, SPBP or SNCP — 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 108.5% if your total Class 1 National Insurance for the previous tax year is £45,000 or lower |
Statutory Sick Pay (SSP)
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.
| Unrounded daily rates | Number of qualifying days in week |
| £16.9642 | 7 |
| £19.7916 | 6 |
| £23.75 | 5 |
| £29.6875 | 4 |
| £39.5833 | 3 |
| £59.375 | 2 |
| £118.75 | 1 |
Seven qualifying days in a week
Use these rates to work out how much SSP you need to pay an employee who works seven qualifying days in a week.
| Number of days to pay | Amount to pay |
| 1 | £16.97 |
| 2 | £33.93 |
| 3 | £50.90 |
| 4 | £67.86 |
| 5 | £84.83 |
| 6 | £101.79 |
| 7 | £118.75 |
Six qualifying days in a week
| Number of days to pay | Amount to pay |
| 1 | £19.80 |
| 2 | £39.59 |
| 3 | £59.38 |
| 4 | £79.17 |
| 5 | £98.96 |
| 6 | £118.75 |
Five qualifying days in a week
| Number of days to pay | Amount to pay |
| 1 | £23.75 |
| 2 | £47.50 |
| 3 | £71.25 |
| 4 | £95 |
| 5 | £118.75 |
Four qualifying days in a week
| Number of days to pay | Amount to pay |
| 1 | £29.69 |
| 2 | £59.38 |
| 3 | £89.07 |
| 4 | £118.75 |
Three qualifying days in a week
| Number of days to pay | Amount to pay |
| 1 | £39.59 |
| 2 | £79.17 |
| 3 | £118.75 |
Two qualifying days in a week
| Number of days to pay | Amount to pay |
| 1 | £59.38 |
| 2 | £118.75 |
One qualifying day in a week
| Number of days to pay | Amount to pay |
| 1 | £118.75 |