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Year-End Updates 2024/2025 |
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Changes in the system relating to UK HR & Payroll, in preparation for the new tax year |
Release date: March 14th 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 2024 (unless another date is 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 2024.
Customers Affected
All customers using the HR module, and all customers using the Payroll & Pension module where pay dates fall on or after the 6th of April 2024.
Release Note Contents
- New and Updated Legislation for the 2024/2025 tax year
- 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
- Pensions (Automatic Enrolment)
- Rolling the Portal Forward into the new tax year
Release Notes
New and Updated Legislation for the 2024/2025 tax year
Investment Zones
Only available from when the portal is rolled into the 2024/2025 tax year.
From the 6th of April 2024, concerning payroll, employers can benefit from Employers National Insurance relief if specific sites within their business are recognised as being within Investment Zones.
Within UK HR & Payroll, users will be able to flag their locations as Investment Zones. This can be done by following the guidance in the November 2nd 2024 Release Note, further noting that a location cannot be set up as both an Investment Zone and a Freeport site - the other option will become unavailable for selection.
Please note: Enabling a location as an Investment Zone incorrectly and making use of the new National Insurance categories is not permitted by HMRC.
With this new legislation, four new National Insurance categories are available:
|
Investment Zone NI Category Letter |
Description | Equivalent Category |
| N | Standard Rate Contributions | A |
|
E |
Married Woman Reduced Rate | B |
| K | Over State Pension Age | C |
| D | Deferment | J |
Information about the rates for these National Insurance Categories can be found below in the PAYE - National Insurance section.
Employees working at Investment Zone locations will need to have their National Insurance category manually changed to an Investment Zone category.
To do this:
- Go to Payroll > Employees > Employee List > search for and select the Employee Record
- From the side menu, select Employee Payroll Info > Pay and Tax Details
- Select an Investment Zone National Insurance category from the drop-down
- Scroll down and Save
Fig.1 - Employee National Insurance Categories with Investment Zone letters available
The Employers National Insurance will then be calculated in line with the new categories.
If an employee moves away from an Investment Zone location, the National Insurance category will need to be manually changed to a non-Investment Zone National Insurance category.
The application of an Investment Zone National Insurance category when the employee is not working at a location that is not accepted as an Investment Zone is prohibited. Full details on the legislation can be found here.
Carer's Leave
Only available from when the portal is rolled into the 2024/2025 tax year.
Following the passing of the Carer's Leave Act 2023, the UK Government has drafted 'Carer's Leave Regulations 2024' which means that, from 6th April 2024, employees who give notice of requiring it on or after this date will have the right to take leave to care for a dependant with long-term care requirements.
The full legislation draft can be found here. Further information from Carer's UK can be found here. Fourth's response to this can be found here.
Fourth's UK HR & Payroll solution has been updated to allow the booking of Carer's Leave for employees, and if the employee is salaried, make the necessary deduction from their pay.
Carer's Leave allowance is stated to be One Week. One week is determined as below for each employment type:
- Full Time or Part Time - The one week of Carer's Leave is based on their Full Time Equivalent (FTE) but if the FTE is not set, it will default to 5 days, meaning 5 days of Carer's Leave is allowed in a 12-month rolling period. If the FTE is set at 3 days per week, then the allowance is 3 days in a 12-month rolling period
- Flexible - This is based on the average number of days worked per week, in the last 52 worked weeks. If the calculation finds the employee has worked 4 days per week on average, then their Carer's Leave allowance is 4 days in a 12-month rolling period
- Casual - The one week of Carer's Leave for a casual employee is defaulted to 5 days. Currently, there is no requirement for Carer's Leave to be taken in hours but instead only in the full week, full days, or half days
If an employee changes employment type, the allowance will be recalculated. If their allowance decreases then no more Carer's Leave will be allowed until the 12-month rolling period allows. The opposite applies if an employee's allowance increases. They will be allowed to take more Carer's Leave in line with their new allowance.
To book Carer's Leave for an employee:
- Go to Payroll > Employees > Employee List > search for and select the Employee Record
- From the side menu, select Employee Payroll Info > Carer's Leave
- Select Add Carer's Leave Day
Fig.2 - Carers Leave Page
- Enter the Carer's Leave Date, whether it is a Full Or Half Day, the Notification Date, and then Save
Fig.3 - Adding Carer's Leave
Fig.4 - Saved Carer's Leave day
If the employee is configured to show on the rota, then the Carer's Leave will be shown as either a Full Day or Half Day depending on what option was selected.
Fig.5 - Half Day Absence - Carer's Leave on Rota (Week view)
Fig.6 - Half Day Absence - Carer's Leave on Rota (Day view)
Fig.6 - Full Day Absence - Carer's Leave on Rota (Week view)
Fig.7 - Full Day Absence - Carer's Leave on Rota (Day view)
Fig.8 - Weekly Attendance Page - Half Day Carers Leave on Rota
Warning: As expected with a full day of Carer's Leave being booked, if a shift is scheduled in the rota it will be cleared out and replaced by the Carer's Leave booked day. The same also applies for half-day Carer's Leave - any shift will be cleared and the rota should be reviewed in the event the shift should be rescheduled for the remaining half day.
Whilst Carer's Leave is a new statutory employee right, it is unpaid. If the employee is Salary Paid, then a deduction from pay will be made once the Carer's Leave is booked (see Fig.9).
Fig.9 - Carer's Leave deduction from pay (Salaried Employee)
Please Note: The Statutory Carer's Leave Deduct line will only show in the Payroll Summary if a deduction is actually present.
Statutory Paternity Leave and Pay
The new Paternity Leave and Pay rules allow fathers to take two weeks of paternity leave, separately, at any point within 52 weeks from the baby's born date. The Payroll module has been updated so that paternity leave can be booked in separate weeks.
The release note for these changes was released on February 1st 2024 and can be found here.
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.10 - Payroll Statutory Information Page
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.11 - Pension Statutory Information Page
PAYE - Income Tax
Tax Codes:
The emergency tax code for 2024/2025 will remain as 1257L.
There will be no tax code uplifts completed for the 2024/2025 tax year.
All Week 1 Month 1 Indicators will not be taken forward into the 2024/2025 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 be notified by P9/P6.
PAYE Income Tax Thresholds:
There is no change compared to the 2023/2024 tax year.
| Earnings Frequency | Threshold |
| Weekly | £242 |
| Monthly | £1,048 |
| Annual | £12,570 |
The UK Rate of Income Tax (Excluding Scotland and Wales):
There are no changes for the 2024/2025 tax year:
| 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 continue to be prefixed with the letter S.
Changes for the 2024/2025 tax year:
- The Starter Tax Rate upper threshold has been increased from £2,162 to £2,306
- The Basic Rate upper threshold has been increased from £13,118 to £13,991
- The Intermediate Tax Rate upper threshold remains unchanged but the lower threshold increases due to the increase of the Basic Rate upper threshold
- The Higher Rate upper threshold has been reduced from £125,140 to £62,430
- A new Advanced Rate has been introduced adopting the SD2 tax code, with a threshold of £62,431 to £125,140, deducting at 45%
- The Top Rate, formerly additional rate, has taken on the SD3 tax code. The rate has been increased from 47% to 48% to be deducted on earnings over £125,140
| Tax Rate | Tax Code | Rate | Income after allowances from | Income after allowances to |
| Starter Tax Rate | - | 19% | £1 | £2,306 |
| Basic Tax Rate | SBR | 20% | £2,307 | £13,991 |
| Intermediate Tax Rate | SD0 | 21% | £13,992 | £31,092 |
| Higher Tax Rate | SD1 | 42% | £31,093 | £62,430 |
| Advanced Rate | SD2 | 45% | £62,431 | £125,140 |
| Top Rate | SD3 | 48% | Over £125,140 | |
The Welsh Rate of Income Tax (WRIT):
Welsh Tax codes will continue to be prefixed with the letter C.
There are no changes for the 2024/2025 tax year:
| 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:
There are no changes to the National Insurance Threshold for the 2024/2025 tax year, with the exception of the introduction of the Investment Zones thresholds:
| 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 | |||||
| Secondary Threshold (ST) | £175 | £350 | £700 | £758 | £9,100 |
| Freeport Upper Secondary Threshold (FUST) |
£481 |
£962 |
£1,924 |
£2,083 |
£25,000 |
| Investment Zone Upper Secondary Threshold (IZUST) | |||||
| Upper Secondary Threshold (UST) | £967 | £1,934 | £3,867 | £4,189 | £50,270 |
| Apprentice Upper Secondary Threshold (AUST) | |||||
| Veterans Upper Secondary Threshold (VUST) | |||||
| Upper Earnings Limit (UEL) |
PAYE National Insurances Rates (Class 1 NIC):
National Insurance Category changes for the 2024/2025 tax year:
- National Insurance has been decreased by 2%. For example, Category A has gone from 10% to 8%
- Four new categories have been introduced for Investment Zones (Referred to as IZ in the table below)
| 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% | 8% | 2% | NIL | 0% | 13.8% | 13.8% | 13.8% |
| B | NIL | 0% | 1.85% | 2% | NIL | 0% | 13.8% | 13.8% | 13.8% |
| C (Over SPA) | NIL | NIL | NIL | NIL | NIL | 0% | 13.8% | 13.8% | 13.8% |
| D (IZ Deferment) | NIL | 0% | 2% | 2% | NIL | 0% | 0% | 13.8% | 13.8% |
| E (IZ MWRRE) | NIL | 0% | 1.85% | 2% | NIL | 0% | 0% | 13.8% | 13.8% |
| F (Freeport Standard) | NIL | 0% | 8% | 2% | NIL | 0% | 0% | 13.8% | 13.8% |
| H (Apprentice Under 25) | NIL | 0% | 8% | 2% | NIL | 0% | 0% | 0% | 13.8% |
| I (Freeport MWRRE) | NIL | 0% | 1.85% | 2% | NIL | 0% | 0% | 13.8% | 13.8% |
| J (Deferment) | NIL | 0% | 2% | 2% | NIL | 0% | 13.8% | 13.8% | 13.8% |
| K (IZ Over SPA) | NIL | NIL | NIL | NIL | NIL | 0% | 0% | 13.8% | 13.8% |
| L (Freeport Deferment) | NIL | 0% | 2% | 2% | NIL | 0% | 0% | 13.8% | 13.8% |
| M (Under 21) | NIL | 0% | 8% | 2% | NIL | 0% | 0% | 0% | 13.8% |
| N (IZ Standard) | NIL | 0% | 8% | 2% | NIL | 0% | 0% | 13.8% | 13.8% |
| S (Freeport Over SPA) | NIL | NIL | NIL | NIL | NIL | 0% | 0% | 13.8% | 13.8% |
| V (Veterans Standard) | NIL | 0% | 8% | 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 2024/2025 tax year.
Apprenticeship Levy Allowance
No change has been made to the Apprenticeship Levy allowance, and it remains at £15,000 for the 2024/2025 tax year.
Student and Postgraduate Loans
Changes for the 2024/2025 tax year:
- Plan Type 1 annual threshold has been increased from £22,015 to £24,990
- Plan Type 4 (Scotland) annual threshold has been increased from £27,660 to £31,395
Please Note: As an advanced notice, there is an expectation of a Plan Type 5 being introduced from April 2026.
| Loan Type | Annual Threshold | Rate |
| Plan Type 1 | £24,990 | 9% |
| Plan Type 2 | £27,295 | 9% |
| Postgraduate Loan | £21,000 | 6% |
| Plan Type 4 (Scotland) | £31,395 | 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)
Changes for the 2024/2025 tax year, effective 1st April 2024:
- National Living Wage age has been reduced from 23 years or older to 21 years or older
- Increases to the National Minimum Wage and National Living Wage are detailed below:
| Age range | Old rate per hour | New rate per hour |
| Apprentice | £5.28 | £6.40 |
| 16 to 17 years old | £5.28 | £6.40 |
| 18 to 20 years old | £7.49 | £8.60 |
| 21 years old onwards (NLW) | N/A | £11.44 |
| Accommodation Offset | £9.10 | £9.99 |
| 21 to 22 years old | £10.18 | N/A |
| 23 years old onwards (NLW) | £10.42 | N/A |
The current rates can also be found here - https://www.gov.uk/national-minimum-wage-rates
Statutory Payments
Statutory Sick Pay
Changes for the 2024/2025 tax year:
- The Statutory Sick Pay rate has increased from £109.40 per week to £116.75 per week
| Amount | |
| Earnings Threshold | £123 |
| Standard Rate (Per Week) | £116.75 |
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 | £16.68 | £33.36 | £50.04 | £66.72 | £83.40 | £100.08 | £116.75 |
| 6 | £19.46 | £38.92 | £58.38 | £77.84 | £97.30 | £116.75 | N/A |
| 5 | £23.35 | £46.70 | £70.05 | £93.40 | £116.75 | N/A | N/A |
| 4 | £29.19 | £58.38 | £87.57 | £116.75 | N/A | N/A | N/A |
| 3 | £38.92 | £77.84 | £116.75 | N/A | N/A | N/A | N/A |
| 2 | £58.38 | £116.75 | N/A | N/A | N/A | N/A | N/A |
| 1 | £116.75 | N/A | N/A | N/A | N/A | N/A | N/A |
Statutory Parental Pay
Weekly rate of pay changes are effective from the 7th of April 2024 for parental pay (1st Sunday of April 2024).
The reclaim rate for parental pay remains at 92%, or 103% for employers who qualify for Small Employers Relief.
Changes for the 2024/2025 tax year:
- The weekly rate of pay for all statutory parental payments has increased from £172.48 to £184.03
| 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 £184.03 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 £184.03 per week or 90% of average weekly earnings |
| Statutory Paternity Pay | The lower of £184.03 per week or 90% of average weekly earnings |
| Statutory Shared Parental Pay | The lower of £184.03 per week or 90% of average weekly earnings |
| Statutory Bereavement Pay | The lower of £184.03 per week or 90% of average weekly earnings |
Upon rolling over into the tax year 2024/2025, all Statutory Payment Schedules will be regenerated based on the above rates where applicable.
Pensions (Automatic Enrolment)
There are no changes for the 2024/2025 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 2024/2025 when your portal is rolled forward into 2024/2025. The Pension Diary automatically generates two years in advance.
Rolling the Portal Forward into the New Tax Year
To arrange for your portal to be rolled forward to the 2024/2025 tax year, your payroll specialist will contact you near the completion of your final pay run for the 2023/2024 tax year. When rolled forward, all rates, thresholds and allowances will automatically update for the 2024/2025 tax year.
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