Guide to the Tax Year 2024-25

In this blog, we give you a run-down of all the changes you need to know about for preparing payroll in 2024-25.

Tax Rates & Allowances

There has been no change to personal allowances or tax bands in England and Wales for 2024-25. In Scotland all bands have altered slightly with starter rate (19%) tax applicable to income between £12,571 and £14,876, basic rate (20%) between £14,877 to £26,561, intermediate rate (21%) applying to income from £26,562-£43,662, and higher rate (42%) between £43,663 and £75,000. There is a new ‘advanced’ rate of tax (45%) applicable to income between £75,001 and £125,140, and the top rate of tax has increased to 48% for income over £125,140.

National Minimum Wage

Rates for all age groups have risen this year, with 16-17 year olds entitled to £6.40 per hour (ph), 18-20 year olds £8.60 ph, and the national living wage for 21 years and over set at £11.44 ph. The apprentice rate has also risen to £6.40 ph.

Student Loan Recovery

Plan 1 Loans: The income threshold which triggers repayment of Student Loans has risen to £24,990 per annum (pa), or £2082.50 per month (pm) / £480.57 per week (pw). The rate of deduction remains the same at 9%.

Plan 2 Loans: The threshold remains the same this year at £27,295pa, or £2274.58 pm / £524.90 pw. Deductions remain at 9%.

Plan 4 Loans: The threshold has risen to £31395 pa, or £2616.25 pm / £603.75 pw. Deductions remain at 9%.

Postgraduate Loans: There have been no changes this year, with threshold remaining at £21,000 pa, and deductions at 6%.


The annual pensions allowance has remained the same at £60,000 this year, with the automatic enrolment trigger and upper and lower limits remaining the same as last year.

Statutory Payments

The qualifying earnings level for statutory payments remains at £123 per week this year.

There has been a slight uplift in Maternity Pay (further 33 weeks rate), Paternity Pay, Adoption Pay, Shared Parental Pay, and Parental Bereavement Pay, with the rate being the lesser of 90% of AWE or £184.03.

The standard weekly rate for Statutory Sick Pay has risen to £116.75 per week, and Statutory maximum redundancy pay has risen to £700 per week.

National Insurance

The rates of National Insurance contributions and thresholds for employers are unchanged for 2024/25, and the employment allowance has remained the same at £5000 pa for eligible employers. For employees, NIC has reduced to 8% for earnings between the primary threshold and upper earnings limit. Earnings above the upper earnings limit, remain unchanged at 2%.

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