The new tax year (2026-2027) starts on 6 April 2026, which brings changes to a range of payroll legislation. This Help Centre article highlights the rates and thresholds to be aware of. The biggest change this year, however, is the reform of statutory sick 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.

The rates for the rest of the UK (England and Northern Ireland) haven't changed since April 2024.

However, income tax rates for Wales are devolved. Any changes to Welsh tax rates for the 2026/2027 tax year will be announced in the Welsh Budget, expected in late-January 2026.

The Scottish tax rates will be announced in the Scottish Budget on 13 January 2026.

Most national insurance thresholds have been frozen until April 2031, with the exception of the lower earnings limit (LEL).

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 rates since April 2025 have been frozen until April 2031.

The following employer national insurance rates have been frozen at 15% from April 2025 to April 2031.

The employment allowance remains at £10,500pa for the 2026/2027 tax year. The eligibility criteria changed to be less restrictive from April 2025. For more information about employment allowance, please refer to our Help Centre article.

The small employer's relief rate remains at 108.5% (100% + 8.5% compensation). For more information about small employer's relief, please refer to our Help Centre article.

These rates apply from your first pay date on or after 6 April 2026.

The new repayment plan 5 applies to English students who took out undergraduate student finance from August 2023 onwards.

This plan has a lower repayment threshold than plans 1, 2 and 4. As a result:

Plan 5 should be used as the default plan type until HMRC issues a Start Notice.

The statutory parental pay rate is applicable from the first Sunday of April (5 April 2026) 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 10th April 2026.

* More information about the changes to statutory sick pay from April 2026 are available on our Help Centre article.

The qualifying earnings thresholds for 2026/2027 remain unchanged from previous tax years.

Employees who have been employed for at least two years are entitled to statutory redundancy pay, which is based on their age, length of service, and weekly earnings (capped at a maximum rate). The new rates for the 2026/2027 tax year will be announced in March 2026:

For more details on calculating termination payments, refer to our Help Centre article.