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Each new tax year brings updates to statutory rates and entitlements that employers need to be aware of. From changes to the National Minimum Wage to adjustments to statutory payments like sick pay and maternity leave, its essential to stay up to date to ensure compliance and support your workforce effectively. Here’s a quick overview of the key updates for 2025/26.
National Minimum Wage rates will increase from the first Pay Reference Period after 1 April 2025 to:
Age |
|
21+ | £12.21 |
18-20 | £10.00 |
Under 18 | £7.55 |
Apprentice under 19 | £7.55 |
The apprentice rate also applies to those over 19 in their first year of Apprenticeship after which they should be paid the National Minimum Wage for their age.
Statutory Holidays
The statutory minimum annual holiday entitlement remains at 28 days (5.6 weeks) per annum for a full-time employee; this can include the Bank Holidays. Part time employees also receive the same entitlement pro rata (e.g., an employee working a 3-day week has an annual entitlement of 3/5ths of 28 days, giving 16.8 days holiday).
Statutory Payments
Statutory Sick Pay will be going up to £118.75 per week payable from day four. Statutory Family Leave: including Maternity, Paternity and Adoption, will rise to £187.18 per week (or 90% of average weekly earnings, whichever is lower). Weeks 1-6 of SMP remain as 90% of average weekly earnings. If you are a small employer then you can now claim 108.5% back from HMRC.
New for 2025-26
Employment Allowance – the government has removed the £100,000 cap therefore if you are eligible for all others sections you can now claim this. Take a look at this link and are now eligible ignoring the £100,000 limit and need any assistance, get in touch.
Did you know that you can pay your PAYE by Direct Debit? Click here for more information, this means payments will be taken automatically rather than you having to remember.
Paternity Leave – this came in during the 2024-25 tax year, but the leave can now be split into two separate full weeks of leave at any time during the first twelve months after birth. More information can be found here – if you require any assistance, please let the team know.
Neonatal Leave – from April 2025 there is a new leave paid at the same rate as other Parental Leave and this covers if the baby needs neonatal care. Both parents can take the leave and it is a day one entitlement.
Employment (Allocation of Tips) Act 2023 – just a reminder that you should have a clear policy for the allocation of tips and they should be distributed no later than the month following the month in which they were given.
Keeping on top of these changes is crucial to ensure you’re paying employees correctly and fulfilling your legal obligations. If you need support understanding how these updates apply to your business, don’t hesitate to get in touch with our payroll team – we’re here to help.