The new tax year starts on 6 April 2025, which brings changes to a range of payroll legislation. This Help Centre article highlights the rates and thresholds to be aware of, as well as the changes to postcodes required for some workers on the FPS. The biggest change this year, however, is the introduction of statutory neonatal care leave and pay. For further information about this, please refer to our Help Centre article.

These rates apply from 1 April, rather than 6 April with most new tax year legislation. They must be applied from the first full pay reference period that falls on or after 1 April.

The pay reference period is when your employees have worked the hours you're paying them for.

Example 1: In April, you pay your employees for the hours they worked between 1st and 30th April. The new rates should be applied to their April pay.

Example 2: In April, you pay your employees for the hours they worked between 16th March and 15th April. The new rates should be applied to their May pay.

For more information about calculating National Minimum Wage, please refer to our Help Centre article.

These rates haven't changed since April 2024.

The Scottish tax rates have not changed. However, the Starter and Basic Rate thresholds have increased. These apply from your first pay date on or after 6 April.

These thresholds haven't changed since April 2024.

These rates haven't changed since April 2024.

For further details about each NI category, please refer to our Help Centre article.

The employer class 1 national insurance rate has increased by 1.2 points, from 13.8% to 15%. These rates apply from your first pay date on or after 6 April.

Employers with workers in designated specialist tax sites must now include each worker's workplace postcode. For further information, please refer to the Workplace postcode required on FPS for workers in specialist tax sites section below.

The Class 1A rate on benefits and expenses reported on a P11D(b), and termination payments have increased by 1.2 percentage points from 13.8% to 15%.

The Class 1B rate on benefits and expenses reported on a PSA has also increased by 1.2 percentage points from 13.8% to 15%.

These rates apply from your first pay date on or after 6 April.

The statutory parental pay rate is applicable from the first Sunday of April (6 April 2025) and is paid for the full statutory week that falls on or after this date. While statutory sick pay is always applicable from 6 April.

The statutory week refers to the day of the week that the employee starts their parental leave.

Example

The employee starts maternity leave on Friday.

Their statutory week runs from Friday to Thursday.

The increased rate is applicable from the week beginning Friday 11th April.

The thresholds for 2025/2026 remain the same as the previous four tax years.

Employers with workers in designated specialist tax sites can pay lower rates of employer National Insurance, only contributing on earnings above £25,000 per year. This relief is applied through specific National Insurance categories:

From April 2026, employers must also report the workplace postcode in the Full Payment Submission (FPS) for workers assigned one of these National Insurance categories. HMRC will use the postcode to verify that the worker is based within a designated specialist tax site (Investment Zone or Freeport) and ensure the relief is claimed correctly.

The postcode included in the FPS must reflect where each worker spends at least 60% of their working time. For example:

In this case:

To prepare for this change:

For further information about national insurance categories, please refer to our Help Centre article.