Payroll Update for the 2023/24 Tax Year

Business people in a meeting

As the end of the financial year 2022/2023 is rapidly approaching, we have gathered a list of key changes that will come into force at the start of the new tax year 2023/2024. If you have any questions about any changes in this Payroll Update that might affect you, please do get in touch with the Payroll Team at RA Accountants – we would be very pleased to hear from you.



The standard employee personal allowance for the 2023 to 2024 tax year is:

  • £242 per week
  • £1,048 per month
  • £12,570 per year

For England, Wales, and Northern Ireland:

PAYE tax rate Rate of tax Annual earnings the rate applies to (above the PAYE threshold)
Basic tax rate 20% Up to £37,700
Higher tax rate 40% From £37,701 to £125,140
Additional tax rate 45% Above £125,140

For Scotland:

PAYE tax rate Rate of tax Annual earnings the rate applies to (above the PAYE threshold)
Starter tax rate 19% Up to £2,162
Basic tax rate 20% From £2,163 to £13,118
Intermediate tax rate 21% From £13,119 to £31,092
Higher tax rate 42% From £31,093 to £125,140
Top tax rate 47% Above £125,140

Emergency Tax codes

  • 1257L W1
  • 1257L M1
  • 1257L X

National Minimum Wage changes

Rate from
April 2023
Current rate
(April 2022- March 2023)
National Living Wage £10.42 £9.50 9.7%
21 – 22 Year Old Rate £10.18 £9.18 10.9%
18 – 20 Year Old Rate £7.49 £6.83 9.7%
16 – 17 Year Old Rate £5.28 £4.81 9.7%
Apprentice Rate £5.28 £4.81 9.7%
Accommodation Offset £9.10 £8.70 4.6&

Statutory Payments

  • Statutory Payments such: Maternity, paternity, adoption, shared parental and parental bereavement pay will increase to £172.48 from the 2nd of April 2023.
  • Maternity allowance will increase from £156.66 to £172.48.
  • Statutory sick pay will increase from £99.35 to £109.40 per week from 6th April 2023.

National Insurance

The national insurance rates have changed not one, not two but three times throughout the 2022-2023 tax year, with the ultimate rates being set as such for all employees and employers for 2023/24 tax year:

  • The Primary Threshold (Employees) will be set at £12,570 per annum, keeping it in line with the income tax threshold, this sets that all employees will benefit of £1,048 per month free of NI charges, after which they will be charged at 12% for each amount over £1,048 till £4,189 per month.
  • The secondary Threshold (Employers) will be set at £9,100 per annum, this means that employers will pay 13.8% on any amount that employees will earn over £758 a month, once the employer has made payments that exceed £9,100.
National Insurance threshold Monthly threshold Annual threshold
Lower earnings limit (LEL) £533 £6396
Primary threshold (PT) £1048 £12,570
Secondary threshold (ST) £758 £9100
Upper earnings limit (UEL) £4189 £50,270
Upper secondary threshold (UST) £4189 £50,270
Apprentice upper secondary threshold (AUST) £4189 £50,270
Veterans upper secondary threshold (VUST) £4189 £50,270
Freeport upper secondary threshold (FUST) £2083 £25,000
National Insurance Rates LEL to PT PT to LEL Above UEL
A O% 12% 2%
B O% 5.85% 2%
C O% O% 0%
F (Freeport) O% 12% 2%
H ( apprentice under 25) O% 12% 2%
I (Freeport – married women / widows) O% 5.85% 2%
J O% 2% 2%
L (Freeport – deferment) O% 2% 2%
M (under 21) O% 12% 2%
S (Freeport – state pensioner) O% 0% 0%
V (verteran) O% 12% 2%
Z (under 21 -deferment) O% 2% 2%


The below table illustrates the thresholds at which an employee will be automatically enrolled into pension.

Current and proposed automatic enrolment thresholds (annual)

Trigger Lower limit qualifying
earnings band
Upper limit qualifying
earnings band
Current (2022/23) £10,000 £6,240 £50,270
Proposed (2023/24) £10,000 £6,240 £50,270

Company Car tax rates

As per 2022’s Autumn statement, company car tax rates are set to increase in two years’ time.

So, while that means no changes for this year, businesses should expect these rates to go up by 1% for all bands in the 2025/2026 tax year, and then another 1% in 2026/2027 and 2027/2028.

Get in touch with RA Accountants’ Payroll team

If you would like to find out more about our payroll service or have any queries about how the changes outlined in this Payroll Update could affect your payroll, please feel free to get in touch the RA Accountants’ Payroll team – we would be very pleased to hear from you.

And don’t forget to download a copy of our 2023 Spring Budget Summary

The 2023 Spring Budget has brought in a number of changes – take a look at our Budget Summary to find out more. If you have any questions about how the Spring Budget could affect you and your business do get in touch.

The information provided on this web site is of a general nature. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from a professional accountant before you take any action or refrain from action. Whilst we endeavour to use reasonable efforts to furnish accurate, complete, reliable, error free and up-to-date information, we do not warrant that it is such. We and our associates disclaim all warranties. The information can only provide an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice.

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