Last updated: 18 October 2026
In the UK, employees’ Income Tax and National Insurance contributions (NICs) are deducted automatically through Pay As You Earn (PAYE). HM Revenue and Customs uses this system to collect tax and NI directly through employers’ payroll.
Payments to employees can include wages, salary, tips, bonuses and statutory pay such as sick or maternity pay. In this guide we set out the PAYE thresholds for 2026/27 for income tax and NI, Emergency Tax Codes, Class 1 NI rates and the National Minimum Wage. The figures apply from 6 April 2026 to 5 April 2027 unless stated otherwise.
PAYE Thresholds 2026/27 for Income Tax
As an employer, the deductions you make from your employees’ wages are based on:
- Their tax codes
- How much of their taxable income is over the personal allowance (£12,570)
Here are the PAYE thresholds for 2026/27 in England, Wales and Northern Ireland:
| PAYE tax rates and thresholds | 2026 to 2027 |
|---|---|
| Personal allowance | £242 per week £1,048 per month £12,570 per year |
| Basic tax rate | 20% on annual earnings above the PAYE tax threshold and up to £37,700 |
| Higher tax rate | 40% on annual earnings from £37,701 to £125,140 |
| Additional tax rate | 45% on annual earnings above £125,140 |
Scottish employees (tax codes starting with S) pay the Scottish rates of 19%, 20%, 21%, 42%, 45% and 48%.
PAYE Thresholds 2026/27 for Class 1 NI
If your employees earn more than the lower earnings limit (£6,708 a year), you must record their earnings, and deduct Class 1 NI through PAYE once they pass the thresholds below:
| Class 1 National Insurance thresholds | 2026 to 2027 |
|---|---|
| Lower earnings limit | £129 per week £559 per month £6,708 per year |
| Primary | £242 per week £1,048 per month £12,570 per year |
| Secondary | £96 per week £417 per month £5,000 per year |
| Upper secondary (under 21) | £967 per week £4,189 per month £50,270 per year |
| Apprentice upper secondary (apprentice under 25) | £967 per week £4,189 per month £50,270 per year |
| Upper earnings limit | £967 per week £4,189 per month £50,270 per year |
Upper secondary thresholds of £50,270 also apply to qualifying veterans, and of £25,000 to eligible employees in freeports and investment zones.
Emergency Tax Codes
Emergency tax codes are temporary codes HMRC uses when it does not have full details of someone’s income. From 6 April 2026, they appear on payslips as:
- 1257L X
- 1257L M1
- 1257L W1
An employee may be put on an emergency code if HMRC does not get their income details in time after:
- they became an employee after being self-employed
- they started receiving a State Pension or company benefits
- they started a new job
An emergency code can mean the employee pays the wrong amount of tax for a while. The code is temporary and will be updated once the employee or employer gives HMRC the correct details, and any over- or underpayment is then corrected.
Class 1 National Insurance Rates
Here are the primary and secondary Class 1 NI rates for 2026/27 for the most common category letters.
Employee (primary) Contribution Rates
As the employer, you deduct primary contributions (employee’s NI) from your employees’ pay through PAYE:
| The letter indicating the NI category | Earnings at or above the lower earnings limit up to and including the primary threshold | Earnings above the primary threshold up to and including the upper earnings limit | Balance of earnings above the upper earnings limit |
|---|---|---|---|
| A | 0% | 8% | 2% |
| B | 0% | 1.85% | 2% |
| C | nil | nil | nil |
| H (apprentice under 25) | 0% | 8% | 2% |
| J | 0% | 2% | 2% |
| M (under 21) | 0% | 8% | 2% |
| Z (under 21 – deferment) | 0% | 2% | 2% |
Employer (secondary) Contribution Rates
Employer’s National Insurance (secondary contributions) is paid to HMRC at these rates:
| The letter indicating the NI category | Earnings up to and including the secondary threshold | Earnings above the secondary threshold up to and including upper earnings limit, upper secondary threshold, apprentice upper secondary threshold | Balance of earnings above upper earnings limit, upper secondary threshold, apprentice upper secondary threshold |
|---|---|---|---|
| A | 0% | 15% | 15% |
| B | 0% | 15% | 15% |
| C | 0% | 15% | 15% |
| H (apprentice under 25) | 0% | 0% | 15% |
| J | 0% | 15% | 15% |
| M (under 21) | 0% | 0% | 15% |
| Z (under 21 – deferment) | 0% | 0% | 15% |
Eligible employers can reduce their employer’s NI bill by up to £10,500 with the Employment Allowance. Class 1A NI on benefits in kind is also 15%.
National Minimum Wages
UK law sets a National Minimum Wage for each category of worker. To check whether you are paying your employees correctly, or whether you owe them arrears for past years, use this calculator. These rates apply from 1 April 2026:
| Category and Age of Worker | Hourly rate |
|---|---|
| Aged 21 and over (National Living Wage) | £12.71 |
| 18 to 20 | £10.85 |
| Below 18 (but above compulsory school leaving age) | £8.00 |
| Apprentices aged under 19 | £8.00 |
| Apprentices aged 19 and over, (in the first year of their apprenticeship) | £8.00 |
Statutory Pay 2026/27
- Statutory Sick Pay: £123.25 a week, or 80% of average weekly earnings if lower. From 6 April 2026 it is paid from the first full day of sickness absence (there are no longer three waiting days), and there is no longer a lower earnings limit.
- Statutory Maternity, Paternity, Adoption, Shared Parental, Parental Bereavement and Neonatal Care Pay: £194.32 a week, or 90% of average weekly earnings if lower.
Quick Sum Up
This guide covers the basic PAYE thresholds for employers for 2026/27. PAYE is how HMRC collects income tax and NI from employees’ pay, and employers operate it through their payroll. Most thresholds are frozen this year, but the lower earnings limit, minimum wage and statutory pay rates have all increased, so make sure your payroll software is up to date.
Disclaimer: This guide provides basic information on PAYE thresholds and rates for 2026/27 and does not replace professional advice.
