Payroll changes for the new 2019/20 tax year

Being an employer and keeping up to date with payroll legislative changes can be difficult.

This blog details some of the key changes taking place from April 2019 which you should be aware of.

The National Minimum and National Living Wage increases

You must ensure that you pay your staff the rates below from April 2019. Note the apprentice rates apply if the employee is aged under 19 or, aged over 19 and in their first year of apprenticeship.

Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice
April 2018 (current rate) £7.83 £7.38 £5.90 £4.20 £3.70
April 2019 £8.21 £7.70 £6.15 £4.35 £3.90



Auto Enrolment Pensions – contribution increase

This April will see the start of increased pension contributions for employers and their staff. The total minimum contribution will rise from 5% to 8%.

Although it is not a legal responsibility to tell staff about the pension changes, employers are encouraged to inform them about the increase.

For those paying the minimum, contributions will be 3% from employers and 5% from employees from April.

Date effective Employer min contribution
Staff contribution
Total min contribution
Old rates, up until 5 April 2018 1% 1% 2%
Currently, from 6 April 2018 to 5 April 2019 2% 3% 5%
6 April 2019 onwards 3% 5% 8%



Student Loans

As well as two types of student loan, a new postgraduate loan (PGL) is in existence.

If an employee earns above the relevant threshold then deductions will need to be taken from their salary to repay the loans.

Please ensure you ask all new employees if they have a loan and if so if it is:

  • Student Loan Plan 1
  • Student Loan Plan 2
  • Postgraduate Loan

Staff can check loan and plan information at



Tax Codes

For 2019/20, the personal allowance will be £12,500 (from £11,850).

The basic rate band will be £37,500 (from £34,500) before higher rate tax kicks in.

You may therefore see staff receiving a higher net pay figure, all other things being equal.

The standard tax code will be 1250L for most employees.

If the code is very different then consider if your employee has another employment or earns over £100,000. They should be able to log onto their Personal Tax Account and access any tax coding notices online.



For those businesses where we run the payroll, a new starter checklist will be issued after April to incorporate some of these changes.

If you have any questions about payroll, then please contact us.