As we step into the new year, there are a number of changes to UK rates and thresholds employers must be aware of. Effective from January 2024, the updates outlined below are crucial for maintaining compliance and ensuring accurate deductions.
One of the key updates has been made to Class 1 National Insurance contributions. The below guide provides in-depth tables outlining the rates applicable to directors and employers from 6th January 2024.
We’ve also included the latest advisory fuel rates. These rates can be used to work out mileage costs if you provide company cars to your employees.
Class 1 National Insurance rates
Employee (primary) contribution rates from 6 January 2024 to 5 April 2024
Deduct primary contributions (employee’s National Insurance) from your employees’ pay through PAYE.
| National Insurance category letter | £123 to £242 (£533 to £1,048 a month)
|
£242.01 to £967 (£1,048.01 to £4,189 a month)
|
Over £967 a week (£4,189 a month)
|
| A | 0% | 10% | 2% |
| B | 0% | 3.85% | 2% |
| C | nil | nil | nil |
| F (Freeport) | 0% | 10% | 2% |
| H (apprentice under 25) | 0% | 10% | 2% |
| I (Freeport — married women and widows reduced rate) | 0% | 3.85% | 2% |
| J | 0% | 2% | 2% |
| L (Freeport — deferment) | 0% | 2% | 2% |
| M (under 21) | 0% | 10% | 2% |
| S (Freeport — state pensioner) | nil | nil | nil |
| V (veteran) | 0% | 10% | 2% |
| Z (under 21 — deferment) | 0% | 2% | 2% |
Employer (secondary) contribution rates from 6 January 2024 to 5 April 2024
You pay secondary contributions (employer’s National Insurance) to HMRC as part of your PAYE bill. Find out more about running payroll and paying HMRC.
Pay employers’ PAYE tax and National Insurance.
| National Insurance category letter | £123 to £175 (£533 to £758 a month) | £175.01 to £481 (£758.01 to £2,083 a month) | £481.01 to £967 (£2,083.01 to £4,189 a month) | Over £967 a week (£4,189 a month) |
| A | 0% | 13.8% | 13.8% | 13.8% |
| B | 0% | 13.8% | 13.8% | 13.8% |
| C | 0% | 13.8% | 13.8% | 13.8% |
| F (Freeport) | 0% | 0% | 13.8% | 13.8% |
| H (apprentice under 25) | 0% | 0% | 0% | 13.8% |
| I (Freeport — married women and widows reduced rate) | 0% | 0% | 13.8% | 13.8% |
| J | 0% | 13.8% | 13.8% | 13.8% |
| L (Freeport — deferment) | 0% | 0% | 13.8% | 13.8% |
| M (under 21) | 0% | 0% | 0% | 13.8% |
| S (Freeport — state pensioner) | 0% | 0% | 13.8% | 13.8% |
| V (veteran) | 0% | 0% | 0% | 13.8% |
| Z (under 21 — deferment) | 0% | 0% | 0% | 13.8% |
Directors — (primary) contribution rates
These rates apply for the whole tax year when not using the alternative calculation method.
Deduct primary National Insurance contributions from your directors’ pay through PAYE.
| National Insurance category letter | £123 to £242 (£533 to £1,048 a month) | £242.01 to £967 (£1,048.01 to £4,189 a month) | Over £967 a week (£4,189 a month) |
| A | 0% | 11.5% | 2% |
| B | 0% | 5.35% | 2% |
| C | nil | nil | nil |
| F (Freeport) | 0% | 11.5% | 2% |
| H (apprentice under 25) | 0% | 11.5% | 2% |
| I (Freeport — married women and widows reduced rate) | 0% | 5.35% | 2% |
| J | 0% | 2% | 2% |
| L (Freeport — deferment) | 0% | 2% | 2% |
| M (under 21) | 0% | 11.5% | 2% |
| S (Freeport — state pensioner) | nil | nil | nil |
| V (veteran) | 0% | 11.5% | 2% |
| Z (under 21 — deferment) | 0% | 2% | 2% |
Directors — employer (secondary) contribution rates
These rates apply for the whole tax year when not using the alternative calculation method.
You pay secondary contributions (employer’s National Insurance) to HMRC as part of your PAYE bill. Find out more about running payroll and paying HMRC.
Pay employers’ PAYE tax and National Insurance.
| National Insurance category letter | £123 per week, £533 per month, £6,396 per year | £242 per week, £1,048 per month, £12,570 per year | £175 per week, £758 per month, £9,100 per year | £967 per week, £4,189 per month, £50,270 per year |
| A | 0% | 13.8% | 13.8% | 13.8% |
| B | 0% | 13.8% | 13.8% | 13.8% |
| C | 0% | 13.8% | 13.8% | 13.8% |
| F (Freeport) | 0% | 0% | 13.8% | 13.8% |
| H (apprentice under 25) | 0% | 0% | 0% | 13.8% |
| I (Freeport — married women and widows reduced rate) | 0% | 0% | 13.8% | 13.8% |
| J | 0% | 13.8% | 13.8% | 13.8% |
| L (Freeport — deferment) | 0% | 0% | 13.8% | 13.8% |
| M (under 21) | 0% | 0% | 0% | 13.8% |
| S (Freeport — state pensioner) | 0% | 0% | 13.8% | 13.8% |
| V (veteran) | 0% | 0% | 0% | 13.8% |
| Z (under 21 — deferment) | 0% | 0% | 0% | 13.8% |
Company cars: advisory fuel rates
Use advisory fuel rates to work out mileage costs if you provide company cars to your employees.
These rates apply from 1 December 2023.
| Engine size | Petrol — amount per mile | LPG — amount per mile |
| 1400cc or less | 14 pence | 10 pence |
| 1401cc to 2000cc | 16 pence | 12 pence |
| Over 2000cc | 26 pence | 18 pence |
| Engine size | Diesel — amount per mile |
| 1600cc or less | 13 pence |
| 1601cc to 2000cc | 15 pence |
| Over 2000cc | 20 pence |
Hybrid cars are treated as either petrol or diesel cars for this purpose.
Check advisory fuel rates for previous periods.
Advisory electricity rate for fully electric cars from 1 December 2023
Amount per mile: 9 pence.
Electricity is not a fuel for car fuel benefit purposes.
It is important to keep up with changes to national insurance as the budgetary environment changes. These changes indicate broader economic factors in addition to having an impact on financial contributions. It’s critical to maintain flexibility and efficient financial planning as people and organisations navigate these changes.
CR Payroll is here to support you and your payroll department in navigating government changes throughout the year. Get in touch to find out how we can support you in 2024.
