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UK PAYE Tax Rates and Allowances 2021/22

This page contains all of the personal income tax changes which were published on the gov.uk site on 2nd Feb 2021. These rates come into effect at the start of the new tax year, on April 6th 2021.

Personal PAYE Allowances

s
Allowance 2020/21 2021/22 Change
Basic £12,500 £12,570 +70
People born between 6th April 1938 - 5th April 1948 £12,500 £12,570 +70
People born before 6th April 1938 £12,500 £12,570 +70
Married Couples Allowance ( if born before 6th April 1935) £9,075  £9,125  +50
Blind Person's Allowance £2,500  £2,520  +20
Marriage Allowance* £1,250  £1,260  +10
*An individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit.

Tax Brackets

Tax Rate 2020/21 2021/22 Change
Basic rate 20% TFA - £37,500 TFA - £37,700  widened by £200
Higher Rate 40% TFA - £37,501 - £150,000 £37,701 - £150,000  narrowed by £200
Additional Rate 45% £150,001+ £150,001+ no change
NOTES:
TFA: Tax Free Allowance amount - you only start paying the basic rate of tax once your earnings go above your tax free allowance.
These rates are applied after your tax free allowance has been deducted from your gross wage.

£200 increase to the Basic Rate tax bracket and a £70 increase in the Basic Personal Allowance means you can earn £270 more a year before crossing into the 40% higher rate threshold for 2021/22.  No change to the Additional Rate threshold for the coming tax year.

Tax Rates – Scotland 2020/21 2021/22
19% Starter rate £12,501 £12,571
20% Basic rate £14,586 £14,667
21% Intermediate rate £25,159 £25,296
41% Higher rate £43,431 £43,662
46% Top rate £150,000+ £150,000+
Tax Rates – Wales 2020/21 2021/22
19% Starter rate £12,501 £12,571
20% Basic rate £14,586 £14,667
21% Intermediate rate £25,159 £25,296
41% Higher rate £43,431 £43,662
46% Top rate £150,000+ £150,000+

Change in take home pay after tax and NI

Gross Wage Net Pay 2020/21 Net Pay 2021/22 Difference
£10,000 £9,940  £9,948 +£8
£20,000 £17,241  £17,263 +£22
£30,000 £24,041  £24,063 +£22
£40,000 £30,841  £30,863 +£22
£50,000 £37,641  £37,663 +£22
£75,000 £52,143  £52,192 +£49
£100,000 £66,643  £66,692 +£49
£125,000 £76,143  £76,192 +£49
£150,000 £90,640  £90,661 +£21
© listentotaxman.com

National Insurance Rates

There have been no changes to the percentage of National Insurance Class 1 contributions, they remain at 12% for employees, and 2% above the upper earnings limit. Employers Class 1 have remained the same at 13.8%. The limits and thresholds have changed, as illustrated in the table below.

National Insurance Bands

Description 2020/21 2021/22 Change
Weekly Lower earnings limit, primary Class 1 £120  £120  0
Weekly Upper earnings limit, primary Class 1 £962  £967  +5
Weekly Primary threshold £183  £184  +1
Weekly Secondary threshold £169  £170 +1
Weekly Upper Secondary Threshold for U21s £962  £967 +5
Apprentice Upper Secondary Threshold for U25s £962  £967 +5
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This article was published in our Tax Rates & Tables section on 31/03/2021.

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