4. Get ready for the new tax year

How to get ready for the 2026/2027 tax year in Sage 50 Payroll.

This is the fourth and final stage of completing your payroll year end. To see all four stages, visit the payroll year end 2026 hub.

Before you process in the new tax year, follow the steps below to ensure your software is ready.

1. Check you're using the correct version

You must use v32 of Sage 50 Payroll to process payments in the 2026/2027 tax year.

Before you start processing in the new tax year, check you're using the latest software update:

1. Log in to Sage 50 Payroll as normal.
2. Go to Help then About.
3. Under Program Details, check the Version Number.

For help with checking your version and updating your software, follow the download and install the Sage 50 Payroll year end update article.

---

2. Apply for Employment Allowance

Employment Allowance allows eligible employers to reduce their annual Employers' National Insurance liability. The allowance remains at £10,500 for the 2026/2027 tax year.

Your software makes applying to HMRC to claim Employment Allowance easy, and tracks how much you've claimed in the tax year.

HMRC started accepting 2026/2027 applications from 6 March 2026.

To find out more about this, visit our Employment Allowance article. Alternatively, to find out how to submit your claim, follow the claiming Employment Allowance article.

---

3. Update your employees' tax codes

For the 2026/2027 tax year, the personal allowance and emergency tax code remain the same at £12,570 and 1257L.

Remove the week 1 / month 1 flag on any employees' tax codes before processing in the new tax year.

For help with doing this, visit the update your employees' tax codes at payroll year end article.

---

4. Small employers' relief (SER)

If you're eligible for SER, set your software to calculate and claim it. This setting doesn't automatically carry over between tax years, as eligibility varies. 

Your software only calculates SER if you enable it before you update records. To find out more about SER and eligibility, visit the SER article.

1. Click Company then Settings.
2. Select the Eligible for Small Employers' Relief checkbox.
3. Click OK.

---

5. Pensions module

If you use the pensions module, follow the steps below.

To find out more about the pensions module if you don't already use it, visit Sage.com.

Automatic enrolment phasing

When you process the first period of the new tax year, you're prompted to check your pension contribution rates are correct.

Find out how in our Automatic enrolment phasing - update the percentages using the Pensions Module article.

Pensions Data Exchange

If you use Pensions Data Exchange (PDX) to send pension data to your provider, follow the prepare PDX for the new tax year article.

---

Next steps

You've completed the steps to get ready for the new tax year. When your first payroll of the new tax year is due, process it as normal.

New legislation for the 2026/2027 tax year

There are some important changes to payroll legislation in the new tax year, including significant changes to Statutory Sick Pay.

If you'd like to see the new legislation, visit our payroll legislation for the 2026/2027 tax year article.

---