Tax thresholds and tax allowances for tax year 2021/2022
Income Tax rates
Item |
2020/21 |
2021/22 |
What does this mean? |
|
Personal Allowance |
£12,500 |
£12,570 |
An employee can earn £12,570 per year before paying any tax at all if they are on the standard 1257L tax code for the next year, that's £242 per week or £1,048 per month |
|
Basic rate (20%) |
£12,500 to £50,000 |
£12,570 to £50,270 |
The next £37,700 of earnings on top of the personal allowance will be taxed at the basic rate of 20% |
|
Higher rate (40%) |
£50,001 to £150,000 |
£50,271 to £150,000 |
Earnings in excess of the personal allowance and basic rate band will be taxed at the higher rate of 40% |
|
Additional rate |
45% |
45% |
Any earnings over £150,000 are taxed at 45% |
National Insurance rates
Item |
2020/21 |
2021/22 |
What does that mean? |
|
Primary Threshold (PT) |
£183 |
£184 |
Employees can earn £184 per week before paying Employee's National Insurance at 12% |
|
Secondary Threshold (ST) |
£169 |
£170 |
Employees can earn £170 per week before Parasol pay Employer's National Insurance at 13.8% |
|
Upper Earnings Limit (UEL) |
£962 |
£967 |
Any weekly earnings above £967 are subject to employee National Insurance contributions at the lower rate of 2% |