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Copy linkYour guide to Payroll Year End 2023
New content: looking for advice on Payroll Year End 2024? Check out our new and updated PYE 24 article.
Tick tock, tick tock, it’s almost that time of year again – Payroll Year End is on the horizon.
No need to panic!
To ensure Payroll Year End 2023 is stress-free, we’ve detailed all the basics, covered the upcoming changes for this year and provided some handy tips.
What is Payroll Year End?
Payroll Year End is the final submission you make to HMRC, where you send vital information such as your Full Payment Submission (FPS) and Employer Payment Submissions (EPS).
Your main tasks include:
- Reporting to HMRC on the previous tax year, which ends on 5 April
- Providing employees with their P60
- Preparing for the new tax year, which starts on 6 April
When is Payroll Year End?
The HMRC payroll tax year runs from 6th April to 5th April of the following year.
Payroll 2023 calendar
The timeline for the main payroll Year End dates for 2023 are:
- Send your final FPS payroll report of the year on or before your employees’ payday
- 5 April: declare your payroll benefits
- From 6 April: update employee payroll records
- From 6 April: ensure your payroll software is updated
- By 31 May: give your current employees a P60
- By 6 July: report employee expenses and benefits if they aren’t being processed through payroll
- By 22 July: pay Class 1A NIC on P11D benefits
Legislative changes for payroll in 2023
Different year, same story.
Payroll Year End 2023 brings with it a range of updates, which you need to be aware of.
Personal allowance threshold
For the 2023-2024 tax year, the personal allowance threshold, which is the amount of income you don’t have to pay tax on, remains £12,570 per year, £1,048 per month and £242 per week.
As there is no change to personal allowance, the L, M and N tax codes also remain the same.
Income Tax rates for England & Northern Ireland
| Rate (%) | Band (£) |
| 20 (Basic Rate) | 1 - 37,700 |
| 40 (Higher Rate) | 37,701 – 125,140 |
| 45 (Additional Rate) | 125,141> |
Income Tax rates for Scotland
| Rate (%) | Band (£) |
| 19 (Starter Rate) | 1 – 2,162 |
| 20 (Basic Rate) | 2,163 – 13,118 |
| 21 (Intermediate Rate) | 13,119 – 31,092 |
| 42 (Higher Rate) | 31,093 – 125,140 |
| 47 (Top Rate) | 125,141> |
*Income Tax rates and thresholds are subject to parliamentary approval.
Income Tax rates for Wales
| Rate (%) | Band (£) |
| 20 (Basic Rate) | 1 - 37,700 |
| 40 (Higher Rate) | 37,701 – 125,140 |
| 45 (Additional Rate) | 125,141> |
*Income Tax rates and thresholds are subject to parliamentary approval.
National Insurance Contributions
In 2023/2024, we see Class 1 National Insurance Contributions (NICs) revert to normal in that a separate set of rates and thresholds are no longer required for employees and directors.
The rate for both Class 1A NICs and Class 1B NICs will be 13.8%.
NICs rates and thresholds for 2023/2024 will be as follows:
| Lower Earnings Limit (LEL) £ | Primary Threshold (PT) £ | Secondary Threshold (ST) £ | Upper Earnings Limit (UEL) £ | Upper Secondary Threshold (UST) £ | Apprentice Upper Secondary Threshold (AUST) £ | Freeport Upper Secondary Threshold (FUST) £ | Veterans Upper Secondary Threshold (VUST) £ | |
| Weekly | 123 | 242 | 175 | 967 | 967 | 967 | 481 | 967 |
| 2 Weekly | 246 | 484 | 350 | 1934 | 1934 | 1934 | 962 | 1934 |
| 4 Weekly | 492 | 967 | 700 | 3867 | 3867 | 3867 | 1924 | 3867 |
| Monthly | 533 | 1048 | 758 | 4189 | 4189 | 4189 | 2083 | 4189 |
| Quarterly | 1599 | 3143 | 2275 | 12568 | 12568 | 12568 | 6250 | 12568 |
| Half-yearly | 3198 | 6285 | 4550 | 25135 | 25135 | 25135 | 12500 | 25135 |
| Annual | 6396 | 12570 | 9100 | 50270 | 50270 | 50270 | 25000 | 50270 |
2023/2024 National Living Wage (NLW) and National Minimum Wage (NMW)
| Description | Rate (£) |
| Aged 23 and above (National Living Wage rate) | £10.42 |
| Aged 21 to 22 | £10.18 |
| Aged 18 to 20 | £7.49 |
| Aged under 18 (but above compulsory school leaving age) | £5.28 |
| Apprentices aged under 19 | £5.28 |
| Apprentices aged 19 and over, but in the first year of their apprenticeship | £5.28 |
You can see rates for previous years here.
2023/2024 Statutory Payment Rates
| Type of payment or recovery | Rate |
| Statutory Maternity Pay (SMP) – weekly rate for first 6 weeks | 90% of the employee’s average weekly earnings |
| Statutory Maternity Pay (SMP) – weekly rate for remaining weeks | £172.48 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Paternity Pay (SPP) – weekly rate | £172.48 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Adoption Pay (SAP) – weekly rate for first 6 weeks | 90% of employee’s average weekly earnings |
| Statutory Adoption Pay (SAP) – weekly rate for remaining weeks | £172.48 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Shared Parental Pay (ShPP) – weekly rate | £172.48 or 90% of the employee’s average weekly earnings, whichever is lower |
| Statutory Parental Bereavement Pay (SPBP) – weekly rate | £172.48 or 90% of the employee’s average weekly earnings, whichever is lower |
| SMP, SPP, ShPP, SAP or SPBP – proportion of your payments you can recover from HMRC | 92% if your total Class 1 National Insurance (both employee and employer contributions) is above £45,000 for the previous tax year 103% if your total Class 1 National Insurance for the previous tax year is £45,000 or lower |
5 top tips for Payroll Year End
1) Be prepared
To ensure Payroll Year End is as smooth as can be, gather all the required data beforehand. Actively chase if you must as you don’t want to have to make corrections in another tax year.
2) Reconcile all previous periods
Check your reports against the HMRC website to make sure they balance.
If they don’t, investigate why.
Doing so will make life so much easier before the deadline and prevent any need for an Earlier Year Update/amended FPS submission.
3) Know what submissions you need to make
Do you need to send an EPS or just an FPS?
RTI submissions can be confusing, so ensure you know which ones you need to make.
| FPS Only | Employees paid in final pay period and EPS not required |
| FPS and EPS | Employees paid in final pay periodForgotten to mark your FPS as the final submission of the yearSent final FPS early and didn’t pay anyone for one or more full tax monthsIf any statutory payments need recoveringApprenticeship Levy paid in tax year |
| EPS only | No employees paid in the final pay period of the tax year |
4) Apprenticeship Levy payments = sending EPS
If you have hit the Apprenticeship Levy threshold at any point during the year you will have to submit an EPS.
This will ensure that the correct amounts are showing against your record.
H3: 5) Create a checklist
Are all the responsibilities feeling overwhelming? Create a checklist for Payroll Year End, stick to it and update it for the following year to use again.
Having a checklist will make sure you have followed all the right steps and you haven’t missed anything crucial.
IRIS is here to help
We’ve got the tools to help you Unlock Your Power, whether you want best-in-class payroll software or to outsource your responsibility completely.
Staffology HR, our integrated payroll and HR solution starts at just £1.50 per employee or alternatively, our world-class outsourcing service is here to help.
*please note this blog is purely for educational purposes and does not constitute as legal advice.
