Summary
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Year-End Updates 2023/2024 |
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Changes made in the system relating to Payroll and Pensions, in preparation for the new tax year |
Release date for all features: 16th March 2023
Year-End Updates 2023/2024
- Enabled by Default? - Yes
- Set up by customer Admin? - No
- Enable via Support ticket? - No
- Affects configuration or data? - No
What's Changing?
This release note contains all changes made in the system required to allow legislative compliance from 6th April 2023 (unless another date otherwise stated).
Reason for the Change
His Majesty’s Revenue and Customs (HMRC) is implementing changes to legislation agreed upon by the UK Government, for the tax year beginning 6th April 2023.
Customers Affected
All customers using the Payroll and Pension module, where pay dates fall on or after the 6th of April 2023.
Release Note Contents
Please Note: Due to there being no new legislation introduced in the 2023/2024 tax year there will not be a partnering article detailing all legislation updates, rates and thresholds. These details are included in this release note instead.
(select a heading from the list below to be taken to that part of the release note)
- Payroll Statutory Information Page
- Pension Statutory Information Page
- PAYE - Income Tax
- PAYE - National Insurance
- Employment Allowance
- Apprenticeship Levy
- Student Loans and Post Graduate Loans
- National Minimum Wage (NMW) and National Living Wage (NLW)
- Statutory Payments - Statutory Sick Pay and Statutory Parental Pay
- Pension (Automatic Enrolment)
- Rolling the Portal Forward into the new Tax Year
Release Notes
Payroll Statutory Information Page
Within the Payroll module, there is a Statutory Information page that contains the rates and allowances for the current and previous tax years. This page is updated annually with the new tax year’s rates and defaults to the tax year the payroll module is in.
- To view this page, go to Payroll Module > Administration > Payroll Statutory Information
Fig.1 - Payroll Statutory Information Page - for example, the NI Thresholds for 2023/2024 Tax Year
Pension Statutory Information Page
Within the Pension module, there is a Statutory Information page that contains the rates and thresholds for the current and previous tax years. This page is updated annually with the new tax year’s rates and defaults to the tax year the payroll module is in.
- To view this page, go to Pension Module > Administration > Pension Statutory Information
Fig.2 - Pension Statutory Information Page - for example, the Lower Thresholds for 2023/2024 Tax Year
PAYE - Income Tax
Tax Codes:
The emergency tax code for 2023/2024 will remain as 1257L
There will be no tax code uplifts completed for the 2023/2024 tax year.
All Week 1 Month 1 Indicators will not be taken forward into the 2023/2024 tax year, for any tax code.
Tax codes with the suffix L, M or N will not increase and any other tax code changes will notify by P9/P6.
PAYE Income Tax Thresholds:
There is no change compared to the 2022/2023 tax year.
| Earnings Frequency | Threshold |
| Weekly | £242 |
| Monthly | £1,048 |
| Annual | £12,570 |
The UK Rate of Income Tax (Excluding Scotland and Wales):
Changes for 2023/2024 tax year:
- The Additional Rate threshold has been reduced from earnings over £150,000 to earnings over £125,140.
| Tax Rate | Rate | Income after allowances from | Income after allowances to |
| Basic Tax Rate | 20% | £1 | £37,700 |
| Higher Tax Rate | 40% | £37,701 | £125,140 |
| Additional Tax Rate | 45% | £125,141+ | |
The Scottish Rate of Income Tax (SRIT):
Scottish Tax codes will be prefixed with the letter S
Changes for 2023/2024 tax year:
- The Additional Tax Rate threshold has been reduced from earnings over £150,000 to earnings over £125,140.
- The Higher Tax Rate percentage has increased from 41% to 42%.
- The Additional Tax Rate percentage has increased from 46% to 47%.
| Tax Rate | Rate | Income after allowances from | Income after allowances to |
| Starter Tax Rate | 19% | £1 | £2,162 |
| Basic Tax Rate | 20% | £2,163 | £13,118 |
| Intermediate Tax Rate | 21% | £13,119 | £31,092 |
| Higher Tax Rate | 42% | £31,093 | £125,140 |
| Additional Tax Rate | 47% | £125,141+ | |
The Welsh Rate of Income Tax (WRIT):
Welsh Tax codes will be prefixed with the letter C
Changes for the 2023/2024 tax year:
- The Additional Rate threshold has been reduced from earnings over £150,000 to earnings over £125,140.
| Tax Rate | Rate | Income after allowances from | Income after allowances to |
| Basic Tax Rate | 20% | £1 | £37,700 |
| Higher Tax Rate | 40% | £37,701 | £125,140 |
| Additional Tax Rate | 45% | £125,141+ | |
PAYE - National Insurance
PAYE National Insurance Thresholds:
Apart from the Annual Primary Threshold for Directors NIC being increased to £12,570, all thresholds have been frozen for the 2023/2024 tax year.
| NI Threshold | Weekly | Fortnightly | Lunar | Monthly | Annually |
|---|---|---|---|---|---|
| Lower Earnings Limit (LEL) | £123 | £246 | £492 | £533 | £6,396 |
| Primary Threshold (PT) Non-Directors | £242 | £484 | £967 | £1,048 | £12,570 |
| Primary Threshold (PT) Directors | N/A | N/A | N/A | N/A | £12,570 |
| Secondary Threshold (ST) | £175 | £350 | £700 | £758 | £9,100 |
| Freeport Upper Secondary Threshold (FUST) | £481 | £962 | £1,924 | £2,083 | £25,000 |
| Upper Secondary Threshold (UST) | £967 | £1,934 | £3,867 | £4,189 | £50,270 |
| Apprentice Upper Secondary Threshold (AUST) | £967 | £1,934 | £3,867 | £4,189 | £50,270 |
| Veterans Upper secondary Threshold (VUST) | £967 | £1,934 | £3,867 | £4,189 | £50,270 |
| Upper Earnings Limit (UEL) | £967 | £1,934 | £3,867 | £4,189 | £50,270 |
PAYE National Insurances Rates (Class 1 NIC):
There is no change compared to how the 2022/2023 tax year ended.
| Employee's Contribution |
Employer's Contribution |
||||||||
| Table Letter | Earnings below LEL | Earnings above LEL up to PT | Earnings above PT up to UEL | Earnings above UEL | Earnings below LEL | Earnings above LEL up to ST | Earnings above ST up to FUST | Earnings above FUST up to UST / AUST / VUST | Earnings above UST / AUST / VUST |
| A | NIL | 0% | 12% | 2% | NIL | 0% | 13.8% | 13.8% | 13.8% |
| B | NIL | 0% | 5.85% | 2% | NIL | 0% | 13.8% | 13.8% | 13.8% |
| C (over state pension age) | NIL | NIL | NIL | NIL | NIL | 0% | 13.8% | 13.8% | 13.8% |
| F (Freeport Standard) | NIL | 0% | 12% | 2% | NIL | 0% | 0% | 13.8% | 13.8% |
| H (Apprentice under 25) | NIL | 0% | 12% | 2% | NIL | 0% | 0% | 0% | 13.8% |
| I (Freeport MWRRE) | NIL | 0% | 5.85% | 2% | NIL | 0% | 0% | 13.8% | 13.8% |
| J (Deferment) | NIL | 0% | 2% | 2% | NIL | 0% | 13.8% | 13.8% | 13.8% |
| L (Freeport deferment) | NIL | 0% | 2% | 2% | NIL | 0% | 0% | 13.8% | 13.8% |
| M (Under 21) | NIL | 0% | 12% | 2% | NIL | 0% | 0% | 0% | 13.8% |
| S (Freeport over pension age) | NIL | NIL | NIL | NIL | NIL | 0% | 0% | 13.8% | 13.8% |
| V (Veterans Standard) | NIL | 0% | 12% | 2% | NIL | 0% | 0% | 0% | 13.8% |
| Z (Under 21 deferment) | NIL | 0% | 2% | 2% | NIL | 0% | 0% | 0% | 13.8% |
Employment Allowance
No change has been made to employment allowance, and it remains at £5,000 for the 2023/2024 Tax year.
Apprenticeship Levy Allowance
No change has been to the Apprenticeship Levy allowance, and it remains at £15,000.
Student and Postgraduate Loans
Changes for 2023/2024 tax year:
- Plan Type 1 annual threshold has been increased from £20,195 to £22,015
- Plan Type 4 (Scotland) annual threshold has been increased from £25,375 to £27,660
| Loan Type | Annual Threshold | Rate |
| Plan Type 1 | £22,015 | 9% |
| Plan Type 2 | £27,295 | 9% |
| Postgraduate Loan | £21,000 | 6% |
| Plan Type 4 (Scotland) | £27,660 | 9% |
Please Note: If an employee knows they have a student loan, but not which Plan Type, select Plan Type 1 as a default. HMRC will correct this with an SL1/SL2 as appropriate.
National Minimum Wage (NMW) and National Living Wage (NLW)
The changes are as follows and apply from the pay period starting on or after 1st April 2023:
| Age range | Old rate per hour | New rate per hour |
| Apprentice | £4.81 | £5.28 |
| 16 to 17 years old | £4.81 | £5.28 |
| 18 to 20 years old | £6.83 | £7.49 |
| 21 to 22 years old | £9.18 | £10.18 |
| 23 years old onwards (NLW) | £9.50 | £10.42 |
| Accommodation Offset | £8.70 | £9.10 |
The current rates can also be found here - https://www.gov.uk/national-minimum-wage-rates
Statutory Payments
Statutory Sick Pay
Changes for the 2023/2024 tax year:
- The Statutory Sick Pay rate has increased from £99.35 per week to £109.40 per week
| Amount | |
| Earnings Threshold | £123 |
| Standard Rate (Per Week) | £109.40 |
The daily rate of SSP, determined by qualifying days is as follows:
| Number of Qualifying Days in the Week | 1 day to pay | 2 days to pay | 3 days to pay | 4 days to pay | 5 days to pay | 6 days to pay | 7 days to pay |
| 7 | £15.63 | £31.26 | £46.89 | £62.52 | £78.14 | £93.78 | £109.40 |
| 6 | £18.24 | £36.47 | £54.70 | £72.94 | £91.17 | £109.40 | N/A |
| 5 | £21.88 | £43.76 | £65.64 | £87.52 | £109.40 | N/A | N/A |
| 4 | £27.35 | £54.70 | £82.05 | £109.40 | N/A | N/A | N/A |
| 3 | £36.47 | £72.94 | £109.40 | N/A | N/A | N/A | N/A |
| 2 | £54.70 | £109.40 | N/A | N/A | N/A | N/A | N/A |
| 1 | £109.40 | N/A | N/A | N/A | N/A | N/A | N/A |
Statutory Parental Pay
Weekly rate of pay changes are effective from the 2nd of April 2023 for parental pay (1st Sunday of April 2023)
The reclaim rate for Parental Pay remains at 92%, or 103% for employers who qualify for Small Employers Relief.
Changes for the 2023/2024 tax year:
- The weekly rate of pay for all statutory parental payments has increased from £156.66 to £172.48
| Parental Pay Type | Pay Amount |
| Statutory Adoption Pay (SAP) - first 6 Weeks | 90% of Average Weekly Earnings |
| Statutory Adoption Pay (SAP) - remaining 33 Weeks | The lower of £172.48 per week or 90% of average weekly earnings |
| Statutory Maternity Pay (SMP) - first 6 Weeks | 90% of Average Weekly Earnings |
| Statutory Maternity Pay (SMP) - remaining 33 Weeks | The lower of £172.48 per week or 90% of average weekly earnings |
| Statutory Paternity Pay | The lower of £172.48 per week or 90% of average weekly earnings |
| Statutory Shared Parental Pay | The lower of £172.48 per week or 90% of average weekly earnings |
| Statutory Bereavement Pay | The lower of £172.48 per week or 90% of average weekly earnings |
Upon rolling over into the tax year 2023/2024, all Statutory Payment Schedules will be regenerated based on the above rates where applicable.
Pensions (Automatic Enrolment)
There are no changes for the 2023/2024 tax year.
Automatic Enrolment thresholds:
| Threshold | Weekly | Fortnightly | Four-Weekly | Monthly |
| Lower level of qualifying earnings | £120 | £240 | £480 | £520 |
| Upper level of qualifying earnings | £967 | £1,934 | £3,867 | £4,189 |
| Earnings trigger for automatic enrolment | £192 | £384 | £768 | £833 |
Automatic Enrolment minimum qualifying contribution rates:
| Contribution Type | Minimum Rate |
| Employer Contribution | 3% |
| Total Contribution | 8% |
| Employee Contribution | The difference between employer and total contribution |
For example:
| Contribution Type | Percentage Spread | |||||
| Employer Contribution | 3% | 4% | 5% | 6% | 7% | 8% |
| Employee Contribution | 5% | 4% | 3% | 2% | 1% | 0% |
| Total Contribution | 8% | |||||
Certified Pension Scheme minimum rates:
| Certification for Pensionable pay for | |||
|---|---|---|---|
| Tier 1 | Tier 2 | Tier 3 | |
| Minimum Total Contributions | 9% | 8% | 7% |
| Minimum Employer Contribution | 4% | 3% | 3% |
| Required Member Contribution where Employer is minimum | 5% | 5% | 4% |
Please Note: If you require any changes to your pension scheme’s default percentage rates because you have tier certification, please send details to your payroll specialist who will ensure the changes are made from the start of the new tax year.
Pension Diary:
The Pension Diary will automatically update to 2023/2024 when your portal is rolled forward into 2023/2024
Rolling the Portal Forward into the New Tax Year
To arrange for your portal to be rolled forward to the 2023/2024 tax year, your payroll specialist will contact you near the completion of your final pay run for the 2022/2023 tax year. When rolled forward, all rates, thresholds and allowances will automatically update for the 2023/2024 tax year.
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