Skip to content
logo Knowledgebase

Legislation changes for the 2021/2022 tax year

Created on  | Last modified on 

Summary

This guide explains the key changes in legislation that affect Sage 50cloud Payroll and Sage Instant Payroll, ahead of the 2021/22 tax year.

Description

Below are all of the changes that affect your payroll processing for the 2021/22 tax year.

PAYE

Tax code changes

The emergency tax code for the 2021/22 tax year has been set as 1257L.

The following tax codes are uplifted:

  • Tax codes suffixed with an LThe numeric part of the tax code increases by seven.
  • Tax codes suffixed with an MThe numeric part of the tax code increases by eight.
  • Tax codes suffixed with an N: The numeric part of the tax code increases by six.

The tables below show the bandwidths for the rest of the UK, Scotland and Wales.

UK Bandwidths & Rates

From (£) To (£) Rate (%) Band
1.00 37,700.00 20.00 Basic rate
37,700.01 150,000.00 40.00 Higher rate
150,000.01 excess 45.00 Additional rate

Scottish Bandwidths & Rates

From (£) To (£) Rate (%) Band
0.01 2,097.00 19.00 Starter rate
2,097.01 12,726.00 20.00 Basic rate
12,726.01 31,902.00 21.00 Intermediate rate
31,902.01 150,000.00 41.00 Higher rate
150,000.01 excess 46.00 Top rate

Welsh Bandwidths & Rates

From (£) To (£) Rate (%) Band
0.01 37,700.00 20.00 Basic rate
37,700.01 150,000.00 40.00 Higher rate
150,000.01 excess 45.00 Additional rate

Tax relief for childcare

  Basic Rate (£) High Rate (£) Higher Rate (£)
Weekly 55.00 28.00 25.00
Monthly 243.00 124.00 110.00
Annually 2915.00 1484.00 1325.00

National Insurance

These are the NI bands & rates for the 2021/22 tax year. The rate for Class 1A in the 2021/22 tax year is 13.80%.

Earnings bands

  Weekly (£) Monthly (£) Yearly (£)
Lower Earnings Limit (LEL) 120.00 520.00 6,240.00
Primary Threshold (PT) 184.00 797.00 9,568.00
Secondary Threshold (ST) 170.00 737.00 8,840.00
Upper Earnings Limit (UEL) 967.00 4189.00 50,270.00
Upper Secondary Threshold (UST) 967.00 4189.00 50,270.00
Apprentice Upper Secondary Threshold (AUST) 967.00 4189.00 50,270.00

 

Rates

  Employee Rate (%) Employer Rate (%)
£0.00 up to LEL 0.00 0.00
LEL up to PT  0.00 0.00
PT to ST 12.00 0.00
ST up to UEL/UST/AUST 12.00 13.80
Excess of UEL/UST/AUST 2.00 13.80

Employment allowance

The employment allowance for the 2021/22 tax year is £4,000.

Apprenticeship Levy

The Apprenticeship Levy Allowance is set to £15,000 and the Apprenticeship Levy Rate is set to 0.5%.

Statutory sick pay (SSP)

Employees that are on weekly earnings greater than or equal to the LEL are entitled to a weekly SSP rate of £96.35. The following table shows the daily rate of SSP by the amount of working days in a week.

Unrounded daily rates Number of working days in 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
£13.7642 7 £13.77 £27.53 £41.30 £55.06 £68.83 £82.59 £96.35
£16.0583 6 £16.06 £32.12 £48.18 £64.24 £80.30 £96.35  
£19.2700 5 £19.27 £38.54 £57.81 £77.08 £96.35    
£24.0875 4 £24.09 £48.18 £72.27 £96.35      
£32.1166 3 £32.12 £64.24 £96.35        
£48.1750 2 £48.18 £96.35          
£96.3500 1 £96.35            

 

Parental pay and leave

The following

Parental leave type Higher Rate (%) Minimum weekly earnings (£) The standard rate is the lesser of Number of weeks paid at higher rate Number of weeks paid at lower rate
Statutory maternity pay (SMP) 90.00 120.00 £151.97 or 90% 6 33
Statutory adoption pay (SAP) 90.00 120.00 £151.97 or 90% 6 33
Statutory paternity pay (SPP) N/A 120.00 £151.97 or 90% N/A 2
Shared parental pay (ShPP) N/A 120.00 £151.97 or 90% N/A 37
Parental bereavement N/A 120.00 £151.97 or 90% N/A 2

Keep in touch (KIT) /Split Days

An employee can use up to 10 KIT days during the maternity / adoption leave period.

An employee can use up to 20 SPLIT days during the shared parental leave period.

Small Employers' Compensation Rate

Additional amount payable to small employers will remain at 3%.

Student / Postgraduate Loans

This table shows the student and postgraduate loan plan types, thresholds and rates for the 2021/22 tax year.

Student Loan

Plan Type Weekly threshold (£) Monthly threshold (£) Annual threshold (£) Rate (%)
One 382.59 1,657.91 19,895.00 9.00
Two 524.90 2,274.58 27,295.00 9.00
Four 480.76 2,083.33 25,000.00 9.00

Postgraduate loan

Weekly threshold (£) Monthly threshold (£) Annual threshold (£) Rate (%)
403.84 1,750.00 21,000.00 6.00

National minimum / living wage rates

The following rates are effective from 1 April 2021.

Age Hourly Rate (£)
23 and older **new rate from April 2021** 8.91
21 - 22 8.36
18 - 20 6.56
16 - 17 4.62
Apprenticeship 4.30

Automatic enrolment

Automatic enrolment bands

Pay reference period Lower level of qualifying earnings (£) Earnings trigger for automatic enrolment (£) Qualifying earnings upper limit (£)
One week 120.00 192.00 967.00
Fortnight 240.00 384.00 1,934.00
Four weeks 480.00 768.00 3,867.00
One month 520.00 833.00 4,189.00
Annual 6,240.00 10,000.00 50,270.00

Pension contributions

The minimum contributions are as follows:

  • Employer minimum contribution: 3%
  • Total minimum contribution: 8%

NHS bands

Tier Pensionable pay from (£) Pensionable pay to (£) Employee contribution rate (%) Employer contribution rate (%)
1 0.00 15,431.99 5.00 14.38
2 15,432.00 21,477.99 5.60 14.38
3 21,478.00 26,823.99 7.10 14.38
4 26,824.00 47,845.99 9.30 14.38
5 47,846.00 70,630.99 12.50 14.38
6 70,631.00 111,367.99 13.50 14.38
7 111,377.00 And above 14.50 14.38

Did this help?

We're always looking to improve our content based on your feedback so if you found this guide helpful, you can easily let me know by using the options below.

 

 

Need more help?

Chat to one of our Sage Ambassadors now.

Chat now

Image