Summary
| Feature 1 | Feature 2 |
|
Statutory Neonatal Care Leave & Pay New functionality to allow users to operate and manage the new Neonatal Care Leave & Pay legislation |
Year-End Updates for the 2025/2026 Tax Year System changes and updates to prepare the Payroll and Pension Modules for roll over into the 2025/2026 Tax Year, starting 6th April 2025 |
Release date for both features: March 13th 2025
Statutory Neonatal Care Leave & Pay
- Enabled by default? - Yes
- Set up by customer admin? - No
- Enable via support ticket? - No
- Affects configuration or data? - Yes
What's Changing?
New functionality for Statutory Neonatal Leave and Pay administration, including updates to existing functionality such as Payslips and Previews to accommodate the new Statutory Pay type.
Reason for the Change
To ensure compliance with the Neonatal Care (Leave and Pay) Act 2023, providing statutory leave and pay for eligible employees.
Customers Affected
All customers using the Payroll module.
Release Note Info/Steps
Please Note: Statutory Neonatal Care Leave & Pay functionality will be available early March 2025. Screenshots taken below are from the testing environments. References of earlier dates and older payment rates below do not reflect those in the live environment.
More information on Statutory Neonatal Care Leave & Pay should be published on the gov.uk website in coming weeks, and the link will be provided here when available. An insight into the legislation can be found here.
A full user guide on operating the Statutory Neonatal Care Leave & Pay functionality in the Payroll module can be found here.
This release introduces comprehensive functionality to support the Neonatal Care (Leave and Pay) Act 2023. Key updates include:
Neonatal Leave and Pay Management:
There is a new employee menu option and list page for adding, viewing, and managing Neonatal Leave records.
- Use the side menu and go to Payroll > Employees > Employee List > select the required Employee
- Then use the employee side menu and go to Payroll > Employee Payroll Info > Statutory Neonatal Leave
Fig.1 - Statutory Neonatal Leave Menu Option (Employee Record)
Fig.2 - Statutory Neonatal Leave List Page (Employees Neonatal Records)
Here, Neonatal Leave records can be added, including linking to parental records already created in the system to automatically carry through entitlement assessments and important dates, or continuing without linking and creating a record from scratch:
Fig.3 - Creating a new Neonatal Record and either Linking an existing Parental Leave or continuing without
Fig.4 - A created Neonatal Record, linked to an existing Parental Record (Paternity)
As with the other Parental functionality in the Payroll Module, users can override entitlements or earnings:
Fig.5 - View and Override Entitlement (pop-up window)
Fig.6 - View and Override Earnings
Please Note: Overriding Earnings is only available for a Neonatal Record not linked to an existing Parental Record. For Neonatal Records linked to an existing Parental Record, the earnings would need to be overridden for the linked Parental Record.
An innovative interactive calendar for booking and managing the tiered Neonatal Leave (Tier One and Tier Two) with appropriate validations against existing leave types (Holiday, Sickness, other Parental Leave) and employee availability, has been introduced (currently for Neonatal only):
Fig.7 - List of booked Neonatal Leave Week information and payment status (Top of the page)
Fig.8 - Neonatal Leave Booking Calendar
Payroll and Reporting Updates:
Updates have been made to payroll previews, payslips, and payroll summaries to display Statutory Neonatal Pay:
Fig.9 - Statutory Neonatal Care Pay (SNCP) - Employee Payroll Summary
Fig.10 - Statutory Neonatal Care Pay (SNCP) - Employee Payslips (Payroll module)
Fig.11 - Statutory Neonatal Care Pay (SNCP) - Payroll Preview (Pop Up)
Fig.11 - Statutory Neonatal Care Pay (SNCP) - Payroll Preview (Basic - Exported)
Year-End Updates for the 2025/2026 Tax year
- Enabled by default? - Yes
- Set up by customer admin? - No
- Enable via support ticket? - No
- Affects configuration or data? - Yes
What's Changing?
This release note contains all changes and updates made to the Payroll and Pension modules to comply with legislation for the 2025/2026 Tax Year.
Reason for the Change
This is an annual process completed to ensure the system remains compliant with legislation set out by governing bodies (UK Government, HMRC) for the 2025/2026 Tax Year.
Customers Affected
All customers using the Payroll and Pension Modules.
Release Note Contents
- Payroll & Pension Statutory Information Pages
- National Minimum Wage & National Living Wage
- Income Tax
- National Insurance
- Employment Allowance
- Apprenticeship Levy
- Student Loans & Postgraduate Loans
- Statutory Payments (Statutory Sick Pay & Statutory Parental Pay)
- Pensions (Automatic Enrolment)
- Bank Holidays
- Full Payment Submission & Employer Payment Summary
- Rolling the Portal forward into the new Tax Year
Payroll & Pension Statutory Information Pages
Within the Payroll and Pension modules, there are Statutory Information pages that contains the rates and allowances for the current and previous tax years. This page is updated annually with the tax year’s rates & thresholds and defaults to the tax year the module is in.
Payroll Module Statutory Information Page
- To view this page, go to Payroll Module > Administration > Payroll Statutory Information
Fig.12 - Payroll Statutory Information Page
Pension Module Statutory Information Page
- To view this page, go to Pension Module > Administration > Pension Statutory Information
Fig.13 - Pension Statutory Information Page
National Minimum Wage & National Living Wage
United Kingdom
National Minimum Wage and Living Wage rates have been updated for the United Kingdom, effective from 1st April 2025:
| Age range | Old rate per hour | New rate per hour |
| Apprentice | £6.40 | £7.55 |
| 16 to 17 years old | £6.40 | £7.55 |
| 18 to 20 years old | £8.60 | £10.00 |
| 21 years old and older (NLW) | £11.44 | £12.21 |
| Accommodation Offset | £9.99 | £10.66 |
The current rates can also be found here - GOV.UK Minimum Wage Rates
Please Note: Remember, updated minimum wage rates are effective from the 1st April 2025, but some employees may not seen their minimum wage increase from the 1st April 2025. Updated minimum wage rates apply from the first full period after the 1st April 2025.
Jersey
National Minimum Wage and Living Wage rates have been updated for the Jersey, effective from 1st April 2025:
| Old rate per hour | New rate per hour |
| £11.64 | £13.00 |
The current rates can also be found here - GOV.JE Minimum Wage Rates
Income Tax
England, Wales & Northern Ireland
- The emergency tax code for 2025/2026 will remain as 1257L.
- There will be no tax code uplifts completed for the 2025/2026 tax year.
- All Week 1 Month 1 Indicators will not be taken forward into the 2025/2026 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.
Please Note: Income Tax Rates & Thresholds will remain frozen until April 2028 based on the current UK Government guidelines, subject to each UK Budget (Excluding Scotland)
There is no change to PAYE Income Tax Thresholds, from the 2024/2025 Tax Year and will remain at:
| Earnings Frequency | Threshold |
| Weekly | £242 |
| Monthly | £1,048 |
| Annual | £12,570 |
There is no change to PAYE Income Tax Rates, from the 2024/2025 Tax Year and will remain at:
| 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 current rates and thresholds for Income Tax can be found here - GOV.UK Income Tax Rates & Personal Allowances
Scotland
Scottish Tax codes will continue to be prefixed with the letter S.
Updates for the 2025/2026 tax year:
- No change to the rate of tax calculation for any tax code
- Starter Tax Rate upper band has increased from £2306 to £2827
- Basic Tax Rate lower band has increased from £2307 to £2828
- Basic Tax Rate upper band has increased from £13991 to £14921
- Intermediate Rate lower band has increased from £13992 to £14922
- No change to the Intermediate Rate upper band.
- No change to lower or upper bands for the Higher, Advanced or Top tax rates.
| Tax Rate | Tax Code | Rate | Income after allowances from | Income after allowances to |
| Starter Tax Rate | - | 19% | £1 | £2,827 |
| Basic Tax Rate | SBR | 20% | £2,827 | £14,921 |
| Intermediate Tax Rate | SD0 | 21% | £14,921 | £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 current rates and thresholds for Scottish Income Tax can be found here - MYGOV.SCOT - Income Tax
National Insurance
Updates for the 2025/2026 tax year:
- Employer National Insurance Rates have increased from 13.8% to 15%
- The Lower Earnings Limit threshold (LEL) has been increased from £123 to £125 (Weekly)
- The Secondary Threshold (ST) has been reduced from £175 to £96 (Weekly)
National Insurance Thresholds:
| NI Threshold | Weekly | Fortnightly | Lunar | Monthly | Annually |
|---|---|---|---|---|---|
| Lower Earnings Limit (LEL) | £125 | £250 | £500 | £542 | £6,500 |
| Primary Threshold (PT) Non-Directors | £242 | £484 | £967 | £1,048 | £12,570 |
| Primary Threshold (PT) Directors | |||||
| Secondary Threshold (ST) | £96 | £193 | £385 | £417 | £5,000 |
| 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) |
National Insurance Rates (Class 1 NIC):
| 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% | 15% | 15% | 15% |
| B | NIL | 0% | 1.85% | 2% | NIL | 0% | 15% | 15% | 15% |
| C (Over SPA) | NIL | NIL | NIL | NIL | NIL | 0% | 15% | 15% | 15% |
| D (IZ Deferment) | NIL | 0% | 2% | 2% | NIL | 0% | 0% | 15% | 15% |
| E (IZ MWRRE) | NIL | 0% | 1.85% | 2% | NIL | 0% | 0% | 15% | 15% |
| F (Freeport Standard) | NIL | 0% | 8% | 2% | NIL | 0% | 0% | 15% | 15% |
| H (Apprentice Under 25) | NIL | 0% | 8% | 2% | NIL | 0% | 0% | 0% | 15% |
| I (Freeport MWRRE) | NIL | 0% | 1.85% | 2% | NIL | 0% | 0% | 15% | 15% |
| J (Deferment) | NIL | 0% | 2% | 2% | NIL | 0% | 15% | 15% | 15% |
| K (IZ Over SPA) | NIL | NIL | NIL | NIL | NIL | 0% | 0% | 15% | 15% |
| L (Freeport Deferment) | NIL | 0% | 2% | 2% | NIL | 0% | 0% | 15% | 15% |
| M (Under 21) | NIL | 0% | 8% | 2% | NIL | 0% | 0% | 0% | 15% |
| N (IZ Standard) | NIL | 0% | 8% | 2% | NIL | 0% | 0% | 15% | 15% |
| S (Freeport Over SPA) | NIL | NIL | NIL | NIL | NIL | 0% | 0% | 15% | 15% |
| V (Veterans Standard) | NIL | 0% | 8% | 2% | NIL | 0% | 0% | 0% | 15% |
| Z (Under 21 - Deferment) | NIL | 0% | 2% | 2% | NIL | 0% | 0% | 0% | 15% |
| X (No NI Due) | NIL | NIL | NIL | NIL | NIL | NIL | NIL | NIL | NIL |
The current rates and thresholds for National Insurance can be found here - GOV.UK - National Insurance Rates
Employment Allowance
Updates for the 2025/2026 tax year:
- Employment Allowance has increased from £5,000 to £10,500
- The £100,000 Employment Allowance Threshold has been removed, meaning all companies with Class 1 NIC liability can claim Employment Allowance.
More information on Employment Allowance can be found here.
Apprenticeship Levy
No change has been made to the Apprenticeship Levy allowance, and it remains at £15,000 for the 2025/2026 tax year.
More information on Apprenticeship Levy can be found here.
Student Loans & Postgraduate Loans
Updates for the 2025/2026 tax year:
- Plan Type 1 annual threshold has been increased from £24,990 to £26,065
- Plan Type 2 annual threshold has been increased from £27,295 to £28,470
- Plan Type 4 (Scotland) annual threshold has been increased from £31,395 to £32,745
- All Plan Type rates remain the same as the 2024/2025 Tax Year.
- Postgraduate Loans rate and thresholds remain the same as the 2024/2025 Tax Year.
- As an advanced notice, Plan Type 5 is being introduced from April 2026.
| Loan Type | Annual Threshold | Rate |
| Plan Type 1 | £26,065 | 9% |
| Plan Type 2 | £28,470 | 9% |
| Postgraduate Loan | £21,000 | 6% |
| Plan Type 4 (Scotland) | £32,745 | 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.
Statutory Payments (Statutory Sick Pay & Statutory Parental Pay)
Statutory Sick Pay
Updates for the 2025/2026 tax year:
- The Statutory Sick Pay rate has increased from £116.75 per week to £118.75 per week
- The Lower Earnings Limit, thus Earnings Threshold for SSP Eligibility, has increased from £123 to £125
| Amount | |
| Earnings Threshold | £125 |
| Standard Rate (Per Week) | £118.75 |
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 | £16.97 | £33.93 | £50.90 | £67.86 | £84.83 | £101.79 | £118.75 |
| 6 |
£19.80 |
£39.59 | £59.38 | £79.17 | £98.96 | £118.75 | N/A |
| 5 | £23.75 | £47.50 | £71.25 | £95.00 | £118.75 | N/A | N/A |
| 4 | £29.69 | £59.38 | £89.07 | £118.75 | N/A | N/A | N/A |
| 3 | £39.59 | £79.17 | £118.75 | N/A | N/A | N/A | N/A |
| 2 | £59.38 | £118.75 | N/A | N/A | N/A | N/A | N/A |
| 1 | £118.75 | N/A | N/A | N/A | N/A | N/A | N/A |
More information on Statutory Sick Pay can be found here.
Statutory Parental Pay
Updates for the 2025/2026 tax year:
- The weekly rate of pay for all Statutory Parental Payments has increased from £184.03 to £187.18
- The new weekly rate of pay for Statutory Parental Payments are effective from the 6th April 2025 (First Sunday of April 2025).
- The Lower Earnings Limit, thus Earnings Threshold for Parental Pay Eligibility, has increased from £123 to £125
- The reclaim rate for parental pay remains at 92%, but for those who qualify for Small Employers Relief will now be able to reclaim 108.5%,which has increased from 103%.
| 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 £187.18 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 £187.18 per week or 90% of average weekly earnings |
| Statutory Paternity Pay | The lower of £187.18 per week or 90% of average weekly earnings |
| Statutory Shared Parental Pay | The lower of £187.18 per week or 90% of average weekly earnings |
| Statutory Bereavement Pay | The lower of £187.18 per week or 90% of average weekly earnings |
| Statutory Neonatal Care Pay | The lower of £187.18 per week or 90% of average weekly earnings |
Please Note: Upon rolling over into the tax year 2025/2026, all Statutory Payment Schedules will be regenerated based on the above rates where applicable.
More information on the different Statutory Parental Leave and Pay types can be found by clicking the Parental Pay Type in the table above. ADD LINK TO NEONATAL PAY WHEN PUBLISHED ON GOV.UK AND DELETE THIS BOLD TEXT.
Pensions (Automatic Enrolment)
There are no changes for the 2025/2026 tax year. Thresholds and rates remain the same as the 2024/2025 Tax year.
As an advanced notice, it is expected (due to being given Royal Assent) for the Automatic Enrolment Pension Age (22) to be reduced as well as the removal of the Lower Earnings Level (£120). This could happen as early as April 2026.
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 2025/2026 when your portal is rolled forward into 2025/2026. The Pension Diary automatically generates two years in advance.
Bank Holidays
For information purposes, here are the UK Bank Holidays impacting the 2025/2026 Tax year. Bank Holidays have the following impact:
- BACS and Payment Submissions to pay employees or third parties (e.g. HMRC) do not include Bank Holidays
- The Payroll Bureau, and other UK Fourth employees, are not in the business on Bank Holidays (with exception to support agents and out-of-hours support from Engineering teams)
Full Payment Submission & Employer Payment Summary
Full Payment Submission
Full Payment Submissions have been updated to allow:
- Submission of Statutory Neonatal Care Pay Year to Date values (FPS Data Item 217)
-
Submission of Workplace Postcode (FPS Data Item 218) for employees on a Freeport or Investment Zone National Insurance Category Letter
- HMRC will now require employees' primary workplace postcode if they are on a Freeport or Investment Zone NI Category. This will be so they can check that NI relief is not being applied to those not actually at a Freeport or Investment Zone location.
-
Workplace Postcode will be taken from the postcode entered in the Location configuration
- (HR Module > Company Admin > Locations)
Please Note: HMRC have also added a new error condition to FPS submissions to check that any employees on a National Insurance Letter of B, E, I or T are born on or before 5th April 1961. If an employee is born after this date, then the FPS will fail for this employee.
Please Note: There were no new data items added to the FPS for the 2024/2025 Tax Year, so the FPS Correction functionality remains unchanged as part of the roll forward into the 2025/2026 Tax Year. For the FPS changes stated above, the correction functionality will be updated as part of the roll forward into the 2026/2027 Tax year, meaning users will be able to update 2025/2026 Tax Year FPS once that tax year is complete.
Employer Payment Summary
Employer Payment Summary submissions have been updated to allow:
- Submission of Statutory Neonatal Care Pay recovered year to date (EPS Data Item 215)
- Submission of NIC compensation on Statutory Neonatal Care Pay year to date (EPS Data Item 216)
Rolling the Portal forward into the new Tax Year
Portals will be available to roll forward into the 2025/2026 Tax Year, from the release date stated in this release note.
To arrange for your portal to be rolled forward to the 2025/2026 tax year, your payroll specialist will contact you near the completion of your final pay run for the 2024/2025 tax year. When rolled forward, all new functionality taking effect in the new Tax Year, all rates & thresholds and allowances will automatically update for the 2025/2026 tax year.
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