New statutory pay rates will take effect in early April, with family-related payments changing from 5 April 2026 and Statutory Sick Pay from 6 April 2026.
The updated weekly rates are:
- Statutory Paternity Pay: increasing from £187.18 to £194.32
- Statutory Shared Parental Pay: increasing from £187.18 to £194.32
- Statutory Adoption Pay: increasing from £187.18 to £194.32
- Statutory Parental Bereavement Pay: increasing from £187.18 to £194.32
- Statutory Neonatal Care Leave Pay: increasing from £187.18 to £194.32
- Statutory Sick Pay: increasing from £118.75 to £123.25
Employers should ensure payroll systems are updated in time for these changes and that any affected employees are paid correctly.
National Minimum Wage increases
New National Minimum Wage (NMW) rates come into force from 1 April 2026.
The updated hourly rates are:
- Age 21 and over (National Living Wage): increasing from £12.21 to £12.71
- Ages 18 to 20: increasing from £10.00 to £10.85
- Under 18s and apprentices: £8.00
For apprentices aged 19 and over who have completed their first year, the applicable rate will be the standard NMW rate for their age group.
These increases will have a direct impact on payroll costs, particularly for employers with large hourly-paid workforces.
Income Tax bands and rates
There are no changes to Income Tax rates, but it is important to remain aware of the current bands:
Taxable income bands:
- Basic rate: £1 to £37,700
- Higher rate: £37,701 to £125,140
- Additional rate: over £125,140
Rates:
- Basic rate: 20%
- Higher rate: 40%
- Additional rate: 45%
National Insurance contributions (Class 1)
HM Revenue and Customs has confirmed the thresholds and rates for the 2026 to 2027 tax year.
Weekly thresholds
- Lower Earnings Limit (LEL): increasing from £125 to £129
- Primary Threshold (PT): remains at £242
- Secondary Threshold (ST): remains at £96
- Upper Earnings Limit (UEL): remains at £967
- Upper Secondary Threshold (under 21s): remains at £967
- Apprentice Upper Secondary Threshold (under 25s): remains at £967
- Employment Allowance: remains at £10,500 per year
Employee contribution rates
- Below LEL: not applicable
- LEL to PT: 0%
- PT to UEL: 8%
- Above UEL: 2%
Employer contribution rates
- Below ST: 0%
- Above ST: 15%
For employees under 21 and apprentices under 25, the 0% rate applies up to their respective upper thresholds, with 15% payable above this.
Additional National Insurance updates
Under the Social Security (Contributions) (Rates, Limits and Thresholds Amendments, National Insurance Funds Payments and Extension of Veteran’s Relief) Regulations 2026, which take effect from 6 April 2026, several further changes will apply:
- The Small Profits Threshold for Class 2 NICs increases from £6,845 to £7,105
- Class 2 NICs rise from £3.50 to £3.65 per week
- Voluntary Class 3 NICs increase from £17.75 to £18.40
- Most weekly earnings thresholds remain unchanged, aside from the LEL increase
- Zero-rate National Insurance contributions for armed forces veterans are extended through the 2026 to 2027 and 2027 to 2028 tax years
Final thoughts
April is always a key month for payroll and HR updates, and 2026 is no exception. Employers should act now to:
- Update payroll systems and processes
- Review workforce pay in line with minimum wage increases
- Ensure compliance with new statutory rates and thresholds
Taking a proactive approach will help avoid costly errors and ensure a smooth transition into the new tax year.
