The 2026/27 tax year for employers: payroll rates and duties

Written for the 2026/27 tax year. Checked against GOV.UK on 6 October 2026.

The 2026/27 tax year runs from 6 April 2026 to 5 April 2027. This guide sets out what it means for payroll: employer National Insurance, the minimum wage, statutory payments, loan deductions, pensions and deadlines. It comes from Wainwrights Accountants in Bromborough, Wirral. We run payroll for employers across the UK. It follows our earlier article, written for the 2025/26 tax year. For the rates outside payroll, see our 2026/27 tax year guide.

Key figures for employers in 2026/27

What do employers pay in National Insurance in 2026/27?

Employers pay 15% National Insurance on most employees’ pay above the secondary threshold. For 2026/27 that threshold is £96 a week, £417 a month or £5,000 a year. The Employment Allowance lets eligible employers reduce their annual National Insurance bill by up to £10,500. The Class 1A rate on benefits is also 15%.

Employees pay their own National Insurance through PAYE. For most, it is 8% on pay between £242 and £967 a week, and 2% above that.

Illustration only. On a salary of £30,000, employer National Insurance is 15% of £25,000 (£30,000 less £5,000), which is about £3,750 before any Employment Allowance.

You need to claim the Employment Allowance every tax year. Two rules to know:

• One director. A company with only one director cannot claim if that director is the only employee liable for employer National Insurance.
• Groups. If companies are connected, only one company in the group can claim.

For Income Tax, the standard employee Personal Allowance is £1,048 a month or £12,570 a year. The PAYE tax rates and bands are different in Scotland.

Which employees have a lower employer National Insurance rate?

GOV.UK lists a 0% employer rate for employees under 21, apprentices under 25 and veterans in their first job since leaving the armed forces. It applies to pay up to £967 a week or £50,270 a year. Above that, the rate is 15%. For a veteran, GOV.UK says the 0% rate applies only for 12 months, starting on the first day of their first civilian job since leaving the regular armed forces. Special tax sites in Freeports and Investment Zones have a lower limit.

The rate depends on the employee’s National Insurance category letter. Most employees have category letter A.

Illustration only. On a salary of £30,000 paid to an employee under 21, there is no employer National Insurance, because £30,000 is below £50,270. The employee still pays their own National Insurance.

What are the minimum wage rates from 1 April 2026?

From 1 April 2026 the National Living Wage is £12.71 an hour for workers aged 21 and over. The National Minimum Wage is £10.85 for workers aged 18 to 20 and £8 for workers under 18. The apprentice rate is £8. GOV.UK says the rates change on 1 April every year.

Apprentices get the apprentice rate if they are under 19, or if they are 19 or over and in the first year of their apprenticeship. After that first year, an apprentice aged 19 or over gets the minimum wage for their age.

What changed for Statutory Sick Pay in April 2026?

GOV.UK says Statutory Sick Pay changed from 6 April 2026. It is now available to all eligible employees regardless of their earnings. It is payable from the first full day of sickness absence, so waiting days no longer apply. The rate is £123.25 a week or 80% of average weekly earnings, whichever is lower.

Statutory Sick Pay is paid for the days an employee normally works, called qualifying days. It is paid for up to 28 weeks. For an employee with 5 qualifying days a week, the standard daily rate is £24.65.

Employers cannot recover Statutory Sick Pay from HMRC.

GOV.UK has separate guidance for sickness absences that started before 6 April 2026 and carried on after it.

What are the statutory parental pay rates for 2026/27?

Statutory Maternity Pay and Statutory Adoption Pay are 90% of average weekly earnings for the first 6 weeks. After that they are £194.32 a week or 90% of average weekly earnings, whichever is lower. Paternity, Shared Parental, Parental Bereavement and Neonatal Care Pay are paid at that same lower rate for 2026/27.

The maternity rate applies from 5 April 2026. The other rates apply from 6 April 2026.

• Maternity and adoption. Pay can last up to 39 weeks: 6 weeks at 90%, then 33 weeks at the lower rate.
• Paternity. Employees can take 1 or 2 weeks.
• Neonatal care. Up to 12 weeks, for a baby born on or after 6 April 2025 who spends at least 7 days in a row in neonatal care and enters that care within 28 days of birth. Parents must be employed in England, Scotland or Wales.

Employers can recover most or all of these payments from HMRC. The 2026/27 recovery rate is 92%. It is 109% if your total Class 1 National Insurance for the previous tax year was £45,000 or lower.

What do employers deduct for student loans and pay into pensions?

Student loan deductions are 9% of earnings above the plan threshold: £26,900 for plan 1, £29,385 for plan 2, £33,795 for plan 4 and £25,000 for plan 5. Postgraduate loan deductions are 6% of earnings above £21,000. For workplace pensions, the employer must pay at least 3% of qualifying earnings.

Workplace pensions. Employers must enrol staff who are aged between 22 and State Pension age, earn at least £10,000 a year and normally work in the UK. Under most schemes, qualifying earnings are total earnings between £6,240 and £50,270 a year. The total minimum contribution is 8%: at least 3% from the employer, with the employee paying the rest. The government kept the £10,000, £6,240 and £50,270 figures the same for 2026/27.

When does payrolling of benefits in kind become compulsory?

GOV.UK says mandatory payrolling is planned to start in April 2027 for company cars, car fuel, vans, van fuel and employer-provided medical benefits, then most remaining benefits in kind from April 2028. The legislation is still in draft. For 2026/27, employers can only payroll benefits they registered before 6 April 2026. Other taxable benefits are reported on a P11D.

The start date was moved from April 2026 to April 2027. GOV.UK says the position for employer-provided loans and accommodation will be confirmed later. This is not yet law. The GOV.UK paper includes draft legislation, and HMRC’s guidance on it is interim, so details may change.

Dates GOV.UK gives for getting ready:

• November 2026. The service to register to payroll non-mandatory benefits voluntarily from April 2027 goes live.
• 5 April 2027. The deadline for that voluntary registration.
• July 2027. Class 1A National Insurance for 2026/27 benefits is still due under the P11D system, while Class 1A on benefits provided from April 2027 starts to be paid in real time. GOV.UK calls this a one-off overlap.

Which payroll year-end deadlines apply to 2025/26 and 2026/27?

For the tax year that ended on 5 April 2026, P60s were due by 31 May 2026, and P11D and P11D(b) forms by 6 July 2026. For 2026/27, P60s are due by 31 May 2027 and P11D forms by 6 July 2027. Class 1A National Insurance must reach HMRC by 22 July, or 19 July if paid by cheque.

The 2026 dates have passed and are shown for reference.

How we price payroll. Our packages for businesses with employees include monthly payroll. Each employee after the first adds £5 a month + VAT. Prices are indicative, and our team confirms the scope and your final price: see pricing. Payroll on its own is always quoted. P11Ds, pension support and PAYE registration are charged services we provide; ask us to add them to your quote. See our payroll services.

What do employers ask us about 2026/27?

What is the employer National Insurance rate for 2026/27?

It is 15% on most employees’ pay above £96 a week or £5,000 a year. The rate is 0% up to £967 a week for employees under 21 and apprentices under 25.

How much is the Employment Allowance in 2026/27?

Up to £10,500. Eligible employers claim it every tax year through their payroll software or HMRC’s Basic PAYE Tools. A company whose only director is the only employee liable for employer National Insurance cannot claim it.

What is the minimum wage for an apprentice?

£8 an hour from 1 April 2026, for apprentices who are under 19, or who are 19 or over and in the first year of their apprenticeship. After that, the rate for their age applies.

Is Statutory Sick Pay paid from the first day of sickness?

Yes. GOV.UK says that from 6 April 2026 Statutory Sick Pay is payable from the first full day of sickness absence, and is available to all eligible employees regardless of their earnings.

Can employers claim statutory payments back from HMRC?

Mostly. For 2026/27 employers can recover 92% of statutory maternity, paternity, adoption, shared parental, parental bereavement and neonatal care pay, or 109% if their total Class 1 National Insurance for the previous tax year was £45,000 or lower. Statutory Sick Pay cannot be recovered.

Do I still need to send P11D forms for 2026/27?

Yes, for taxable expenses and benefits that were not payrolled. They are due by 6 July 2027, with the P11D(b). GOV.UK says mandatory payrolling is planned to start in April 2027 for the first group of benefits. The legislation is still in draft.

Can Wainwrights run our payroll?

Yes. Our packages for businesses with employees include monthly payroll, and payroll on its own is always quoted. Get a quote or book a free call and we will go through what you need.

Payroll rates and rules change from one tax year to the next, and how they apply depends on your own staff and pay. To talk yours through with an accountant in Bromborough, get a quote or book a free call.