Payroll changes from April 2026 Tax Year
March 16, 2026
As of April 2026, the UK Government have implemented some changes to payroll and employment law.
Here is a list of changes to payroll which will happen in the 2026/27 Tax Year and will help to get you ready:
National Minimum Wage Rates
National minimum wages will increase and will be applied from the 1st of April 2026, below are the changes:
| Category of Worker | 2025-26 Tax Year Hourly Rate | New 2026-27 Tax Year Hourly Rate |
| Aged 21 and above | £12.21 | £12.71 |
| Aged 18 – 20 | £10.00 | £10.85 |
| Aged under 18 | £7.55 | £8.00 |
| Apprentices aged under 19 | £7.55 | £8.00 |
| Apprentices aged 19 and over but in the first year of their apprenticeship | £7.55 | £8.00 |
Statutory Sick Pay (SSP)
- The weekly rate of SSP will be increased from £118.75 to £123.25 or 80% of the employee’s average weekly earnings, whichever is lower
- SSP will be payable from the first day of sickness, the first 3 days known as ‘qualifying days’ will be removed
- Previously the first 3 days were unpaid however employees eligible for SSP will be able to claim SSP from the first day of sickness
- The Lower Earnings Limit (LEL) will be removed, anyone with normal weekly earnings below £123.25 will receive 80% of their normal weekly earnings so all employees will be eligible
Student Loans
- Introduction of the new ‘Plan 5’ Student Loan
- Only applies to all new undergraduate students in England starting from August 2023
- HMRC new starter checklist from April 2026 will contain this information
- Plan 1 student loan threshold has increased to £26,900 per year
- Plan 2 student loan threshold has increased to £29,385 per year
- Plan 4 student loan threshold has increased to £33,795 per year
Statutory Maternity, Paternity, Adoption, Shared Parental, Parental Bereavement and Neonatal Care Pay
SMP, the weekly rate for the first 6 weeks will still be the same so first 6 weeks will be paid at 90% of the employee’s average weekly earnings, but there are increase to statutory weekly payment as of the 5th of April 2026:
- Maternity, Paternity, Adoption pay has risen to £194.32 or 90% of the employee’s average weekly earnings, whichever is lower
| Statutory Payment | Weekly Rate |
| Statutory Maternity Pay Weekly rate for first 6 weeks |
£194.32 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Paternity Pay (SPP) | £194.32 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
|
£194.32 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Shared Parental Pay (ShPP) | £194.32 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Parental Bereavement Pay (SPBP) | £194.32 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Neonatal Care Pay (SNCP) | £194.32 or 90% of the employee’s average weekly earnings, whichever is lower |
National insurance Lower earnings limit (LEL) has slightly increased to:
- Weekly – £129
- Monthly – £559
- Yearly – £6,708
State pension age
- From April 2026 state pension age will increase from 66 to 67
There are no other changes to Income Tax, NIC thresholds and employment allowance these have stayed the same as last tax year.
These articles are for guidance only and professional advice should be obtained before acting on any information contained in them. No responsibility can be accepted for loss occasioned howsoever to any person as a result of action taken or refrained from as a result of reading.
