Not sure how much income tax to deduct from your employees?
The amount of income tax you deduct from your employees depends on their tax code (https://www.gov.uk/employee-tax-codes) and how much of their taxable income is above their personal allowance (https://www.gov.uk/income-tax-rates/current-rates-and-allowances).
The tax thresholds and rates for England and Wales from 6 April 2021 up until 5 April 2022 are: –
| Personal allowance | £242 per week£1,048 per month£12,570 per year |
| UK basic tax rate | 20% on annual earnings above the PAYE tax threshold and up to £37,700 |
| UK higher tax rate | 40% on annual earnings from £37,701 to £150,000 |
| UK additional tax rate | 45% on annual earnings above £150,000 |
The thresholds are being frozen until April 2026.
There are different rates for Scotland.
The emergency tax codes from 6 April 2021 are:
- 1257L W1
- 1257L M1
- 1257L X
To find out more about emergency tax codes please visit https://www.gov.uk/tax-codes/emergency-tax-codes.
For more detailed information on this, please visit https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2021-to-2022.