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Key employment statistics
Contents
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National Minimum Wage
As from 1 October 2011 the rates are as follows:
- adult rate (for those aged 21 and over): £6.08 per hour (previously
£5.93 per hour)
- youth rate (18-20): £4.98 per hour (previously £4.92 per hour)
- rate for those aged 16 and 17-year-olds: £3.68 per hour (previously
£3.64 per hour)
- apprentices not otherwise covered by the NMW: £2.60 per hour (previously
£2.50 per hour)
- the maximum amount that can be offset where accommodation is provided
will be £4.73 per day (previously £4.61 per day).
Please note:
- The apprentice rate applies to employed apprentices who are under age 19
or who are aged 19 or above in their first 12 months of apprenticeship, for all
hours spent working and training; other apprentices must be paid the relevant
higher rate. Non-employed apprentices continue to be exempt from the NMW.
- Note that tips, service charges, gratuities and cover charges, whether
discretionary or mandatory, do not count towards the NMW.
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Statutory Sick Pay (SSP)
Statutory Sick Pay is payable for up to 28 weeks. The employee must earn a
minimum of the Lower Earnings Limit. The rate of SSP as
from 6 April 2011 is £81.60
(£85.85 per week after 6 April 2012).
The daily rate of SSP is calculated by dividing the weekly amount by the number of
qualifying days in the week. To calculate the rate for a number of days, the unrounded
rate is multiplied by the number of days and rounded up to a whole penny.
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Statutory Maternity Pay (SMP)
For employees who earn more than the Lower Earnings Limit:
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Length of service
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Maternity leave
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SMP
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Less than 26 weeks' service at the beginning of
the 14th week before the Expected Week of
Confinement (EWC)
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Up to 52 weeks
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No entitlement
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26 weeks' service or more at the beginning of the
14th week before the EWC
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Up to 52 weeks
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Six weeks at 90% of earnings (even if this is less than the SMP weekly
rate) and up to 33 weeks at £128.73 (from 3 April 2011
- £135.45 after 9 April 2012)
OR
90% of earnings (whichever is less)
The remaining 13 weeks are unpaid
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Statutory Maternity Pay is reimbursed to the employer. The rate depends on how
much the employer has paid in National Insurance Contributions in the previous tax
year:
- Tax year 2010-2011:
up to £45,000 paid in NI contributions - 100% SMP paid, plus 4.5%
compensation
£45,000 or more paid in NI contributions - 92% of SMP paid.
- Tax year 2011-12:
up to £45,000 paid in NI contributions - 100% SMP paid, plus 3%
compensation
£45,000 or more paid in NI contributions - 92% of SMP paid.
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Statutory Paternity Pay (SPP)
Subject to meeting the eligibility criteria, working fathers have the right to two
weeks' paid paternity leave  . This is paid at the same rate as the lower
rate of SMP, ie £128.73 from 3 April 2011
(£135.45 after 9 April 2012)
or 90% of earnings, whichever is less.
Statutory Paternity Pay is reimbursed to the employer. The rate depends on how
much the employer has paid in National Insurance Contributions in the previous tax year:
- Tax year 2010-2011:
up to £45,000 paid in NI contributions - 100% SPP paid, plus 4.5%
compensation
£45,000 or more paid in NI contributions - 92% of SPP paid.
- Tax year 2011-12:
up to £45,000 paid in NI contributions - 100% SPP paid, plus 3%
compensation
£45,000 or more paid in NI contributions - 92% of SPP paid.
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Statutory Adoption Pay (SAP)
Subject to meeting the eligibility criteria, one of the adoptive parents may take
paid adoption leave, for the same period as maternity leave, when a child is first
placed with a family. Payment for adoption leave is at the same rate as lower rate
SMP, ie £128.73 from 3 April 2011
(£135.45 after 9 April 2012)
or 90% of earnings (whichever is less).
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Employer-supported childcare
Employers can contribute up to £55 per week (£243 per month)
towards childcare costs, free of National Insurance contributions and subject to tax relief
(see below), provided this benefit is offered to all employees. The payment may be
made by voucher or otherwise and the care must be provided by an approved childcarer,
whether registered childcare or approved home-childcare.
Note however that for those who join a scheme on or after 6 April 2011, the tax
relief is restricted to the standard income tax rate of 20%. The exempt amount is
therefore as follows:
- £22 (£97 per month) for employees with an 'employment
income amount' estimated to exceed the higher rate limit for the tax year
- £28 (£124 per month) for employees with an 'employment
income amount' estimated to exceed the basic rate limit but not the higher rate
limit for the tax year
- £55 (£243 per month) otherwise.
Note that the restriction on tax relief only applies to those who join a scheme
after 6 April 2011. Employees who joined the scheme before 6 April 2011, who remain
in their
current
employment and during that period there has not been a continuous period of 52 weeks
throughout which vouchers and/or childcare were not being provided for the employee
under the scheme, will continue to get tax relief as
currently. For more guidance on assessing the 'employment income
amount' and operating the scheme, see the
HMRC guidance.
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Guarantee payments ("lay-off pay")
The guaranteed daily rate for employees who are laid off work under the
Employment Rights Act 1996 is £22.20
(from 1 February 2011).
This will increase to £23.50 from 1 February 2012.
Employees are entitled to guarantee payments for up to five workless days in any
three month period. Where the normal working week is less than five days, the
number of days' entitlement to guarantee pay is reduced accordingly.
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Week's pay
The maximum weekly wage used for calculating statutory redundancy payments,
basic awards, and other statutory compensation is £400 for all dismissals taking
effect on or after
1 February 2011.
This will increase to £430 for dismissals occurring on or after 1 February 2012.
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Statutory Redundancy Pay (SRP)
The amount of Statutory Redundancy Pay is the 'number of weeks' multiplied by
the lower of either the actual average weekly wage or a maximum weekly
wage of £400 (as from
1 February 2011).
This will increase to £430 for dismissals occurring on or after 1 February 2012.
The 'number of weeks' relates to the employee's age and completed years of
continuous service as at the date the notice period would expire. See our
Redundancy Pay ready reckoner . The maximum number of weeks is 30,
therefore the maximum statutory redundancy payment is £12,000
(£12,900 for dismissals occurring on or after 1 February 2012).
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Tribunal awards
Unfair dismissal: compensation for unfair dismissal is made up of a
basic award which is similar to a redundancy payment (therefore a
maximum basic payment of £12,000 as from
1 February 2011
- £12,900 for dismissals occurring on or after 1 February 2012)
and a compensatory award. The maximum compensatory award a tribunal
can award to an employee who brings a successful unfair dismissal claim is
£68,400.
This will increase to £72,300 for dismissals occurring on or after 1 February 2012.
The total potential liability for a normal unfair dismissal claim is
£80,400
(£85,200 for dismissals occurring on or after 1 February 2012).
Note also the following:
- Automatic unfair dismissal - basic award: a minimum basic award
of four weeks' pay (£1,600
but £1,720 after 1 February 2012)
is made where a dismissal is regarded as
automatically unfair under section 98A(i) of the Employment Rights Act 1996
if the basic award is less than this amount. However such an award need not be
made where it would result in injustice to the employer.
- Unfair dismissal - minimum basic award: for unfair dismissal for a
reason related to the complainant's appointment as a Health and Safety
representative, exercise of rights under the Working Time Regulations, activities
as a pension scheme trustee, activities as an employee representative in
connection with redundancies or a transfer of undertakings is £5,000
(£5,300 after 1 February 2012).
- Union membership: the minimum basic award for dismissal or
selection for redundancy on grounds related to union membership or activities is
£5,000
(£5,300 after 1 February 2012).
The minimum compensation awarded for exclusion or expulsion from a
trade union is £7,600
(£8,100 after 1 February 2012).
The award for unlawful inducement relating to trade union membership activities,
or for unlawful inducement relating to collective bargaining is £3,300
(£3,500 after 1 February 2012).
There is no limit on the amount of compensation for cases of whistleblowing,
certain health or safety matters, or discrimination due to a
protected characteristic and awards may included compensation for
injury to feelings in discrimination cases. Guidance on injury to feelings awards was
set out by the Court of Appeal in Da'Bell v NSPCC :
- lower band: up to £6,000 - to reflect less serious cases - for example
minor one-off occurrences
- middle band: up to £18,000 - for serious cases that don't merit the
highest awards
- upper band: up to £30,000 - for the most serious cases - for example
a campaign of harassment.
Breach of contract claims: the maximum award a tribunal can make
is £25,000.
In addition, the tribunal may award the following:
- Refusal of right to be accompanied at a grievance or disciplinary meeting
or a meeting to discuss a statutory flexible working request: 2 x a week's pay,
so maximum of £800
(£860 after 1 February 2012)
- Failure to consider a flexible working request: 8 x a week's pay, so
maximum of £3,200
(£3,440 after 1 February 2012)
- Failure to inform/consult on a TUPE transfer: 13 x a week's pay, so
maximum of £5,200
(£5,590 after 1 February 2012)
- Failure to provide written particulars of employment: 4 x a week's
pay, so maximum of £1,600
(£1,720 after 1 February 2012)
Interest is incurred if the awards are not paid within 42 days (or within 14 days in
discrimination cases). Tax and NI are not normally deducted if the payment is made to
an ex-employee, unless over £30K or reinstatement has been ordered.
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Income tax
2011-12 tax year
- Personal allowance for the PAYE tax threshold: £7,475.
- Personal allowance for someone aged 65-74: £9,940.
- Personal allowance for someone aged 75 and over: £10,090.
- Basic rate limit (the level of taxable earnings above which the 40% tax
rate applies): £35,000.
- Higher rate tax threshold (the sum of the basic rate limit and the personal
allowance): £42,475. The NICs upper earnings limit is reduced to this figure.
- There is no change to the higher rate limit, currently £150,000.
2012-13 tax year (announced but unconfirmed)
- Personal allowance for the PAYE tax threshold: £8,105.
- Personal allowance for someone aged 65-74: £10,500.
- Personal allowance for someone aged 75 and over: £10,660.
- Basic rate limit (the level of taxable earnings above which the 40% tax
rate applies): £34,370.
- Higher rate tax threshold (the sum of the basic rate limit and the
personal allowance): £42,475.
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National Insurance Contributions (NICs)
Tax year 2011-12:
- Lower Earnings Limit: £102.00 per week, £442 per
month.
- The threshold after which NICs become payable is £139 per week.
- Employees' class 1 NIC rates are 12% on earnings between the threshold
and upper earnings limit; and 2% on earnings above the upper earnings limit.
- Upper Earnings Limit: £817 per week, £3,540 per month.
The threshold for employers' secondary National Insurance Contributions
will be £136 per week. Contributions will be 13.8% of all earnings above this
figure.
Tax year 2012-13: (announced but unconfirmed)
- Lower Earnings Limit: £107.00 per week, £464 per
month.
- The threshold after which NICs become payable will be £146 per week.
- Employees' class 1 NIC rates remain as 12% on earnings between the threshold
and upper earnings limit; and 2% on earnings above the upper earnings limit.
- Upper Earnings Limit remains unchanged.
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Taxation of company cars
The benefit charge for a company car is calculated initially as a percentage of the
car's list price. The percentage charge depends on the car's rated CO2 emisson level,
ranging from 15% for the most efficient vehicles to a maximum of 35% for heavy
polluters.
The CO2 emissions qualifying for the minimum petrol percentage (15%) charge are
130 grams per kilometre of CO2 for the tax year 2010/2011; and 125g for 2011/12.
For details of individual cars, click
here.
Changes from 2011-12:
The car benefit rules have been simplified for 2011-12 onwards. From 6 April 2011:
- there will be three letters to describe cars: E for electric only cars (as before),
D for all diesels (previously types D and L) and A for all other types (previously
types H, B, C, G and P)
- there will no longer be any reductions for alternative fuels
- the diesel surcharge will apply to all diesels, whenever registered
- the £80,000 limit for the price of a car for car benefit purposes will no
longer apply
- the lower threshold (the CO2 emissions figure which sets the 15 per cent rate)
will be reduced from 130g/km to 125g/km
- the lowest appropriate percentage is 0% and applies to cars with CO2
emissions of zero
- cars with CO2 emissions of less than 75g/km have a percentage of 5%
- cars with CO2 emissions of 76g/km to 120g/km have a percentage of 10%
and thereafter the rate is 15% increasing by 1% for every 5g/km to the
current maximum of 35% (emissions of 225g/km and above)
For 2012/13, the range will widen to between 11% and 35% for emission ratings
of 100 to 220 g/km, with a fixed 10% for emission ratings below 100g/km.
A further increase will apply to 2013/14 to between 11% and 35% for emission
ratings between 95 and 215g/km, with the 10% rate applying to ratings below 95g/km.
The objective is to encourage businesses to use ultra-low carbon cars.
There are no changes to the 0% charge for zero emission cars and the 5% charge
for low emission cars with emission ratings up to 75g/km.
For further details, see:
The Car Fuel Benefit Order 2011.
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Car fuel benefit
Fuel benefit charge is linked directly to carbon dioxide emissions. The charge
applies where an employee who has a company car is provided with free fuel for
private use. The same percentage figures are used as for the company car benefit charge.
Like car benefit, the fuel benefit charge is based on the level of CO2 emissions of
the car, with the same 3 per cent supplement for diesels which do not meet Euro
IV standards and reductions for alternatively fuelled cars. Also like car benefit, the
percentages for petrol and diesel range from 15 - 35% and the percentage for alternative
fuels and hybrid cars can be below 15% with reductions.
To calculate the benefit charge on free fuel the percentage figure will be multiplied
against a set figure of £18,800 from April 2011 (previously £18,000 ).
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Employer provided vans
Employees who are obliged to take their vans home, but are prevented from making
any other private use of the vehicle, are exempted from any tax charge.
The scale charge for unrestricted private use is £3,000, whatever the age
of the van. An additional fuel scale charge of £550 (from April 2010) applies
where fuel is provided for private mileage. These are unaltered for the 2011/12 tax year.
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Authorised mileage rates - own vehicle
For employees who use their own vehicles for business travel (irrespective of
engine size). These payments are free from tax and NICs.
Motorcars and vans:
- up to 10,000 miles: 45p per per mile (increased with effect from 6.4.11; previously 40p)
- over 10,000 miles: 25p per mile
Motorcycles:
- 24p per mile (irrespective of how many miles)
Bicycles:
- 20p per mile (irrespective of how many miles)
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Authorised mileage rates - company-provided vehicles
The HMRC advisory rates used to negotiate dispensations for mileage payments
for business travel in company cars are below. These were adjusted with effect from 1
December 2011. They only apply where employers reimburse employees for business
travel in their company cars, or require employees to repay the cost of fuel used for
private travel.
Engine size (petrol or LPG):
Note: petrol hybrid cars are treated as petrol for this purpose.
Engine size (diesel):
- up to 1600 cc: 12p
- 1601 - 2000 cc: 15p
- over 2000 cc: 18p
The rates are now to be reviewed four times a year, with any changes taking
effect at the beginning of each calendar quarter (on 1 March, 1 June, 1 September and
1 December). Further details are available on the
HMRC website.
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Hospitality to employees
Employers are allowed to provide hospitality tax-free to employees (eg summer
events, Christmas party) up to a total maximum of £150 per employee per year,
provided that this is available to all employees. This limit applies to everything - hire of
facilities, food, drink, entertainment, incidental costs, transport, overnight
accommodation and VAT.
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Termination payments
The following termination payments are tax-free, up to a total maximum of
£30,000:
- statutory redundancy pay
- non-statutory redundancy pay
- ex-gratia payments on the death or disability of an employee
- compensation for wrongful dismissal
- certain other termination payments for which the employee has no
contractual entitlement.
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Relocation
An employer may provide up to £8,000 tax free to an employee to help
him/her to relocate (any additional sums are taxable).
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State pension
The full basic state pension for a single person for the 2011-12 tax year is
£102.15 for a single person and £163.35 for a married couple.
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Occupational pension schemes
There are two limits on an individual's tax-relieved pensions savings, in the form
of an annual and lifetime allowance.
The amount on which tax relief on pension savings is granted fell from
£255,000 a year to £50,000 from April 2011. The lifetime limit for tax-free
pension saving will fall from April 2012, from £1.8 million to £1.5 million.
However there are exemptions for those taking a deferred or ill-health retirement, and
the option of carrying over unused allowances within a three-year period.
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Stakeholder pensions
All employers (other than those who are exempt) are required to consult with their
employees and choose, and put into place, a stakeholder scheme.
Exempt employers include: those who have less than five employees; those who
have an Occupational Pension scheme already in place which all employees can join
within a year of starting employment; and those who offer a group personal pension
to all staff, contribute at least 3% of basic salary, offer payroll deductions if asked and
have no exit/transfer charges.
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Employee Share Schemes
The following schemes are approved by the HMRC and offer tax advantages:
- Savings Related Share Option Schemes (SAYE): where the employee can
contribute a maximum of £250 per month to acquire shares at the end of a
three, five or seven year period.
- Share Incentive Plans (SIPs): each year, companies can give up to
£3,000 worth of shares to each employee. Employees can also buy up to
£1,500 worth of shares, which can be matched by the company with up to
two matching shares for each share an employee buys. These schemes also offer NIC
advantages. (Also known as All Employee Share Ownership Plans; Employee Share
Plans.)
- Company Share Option Plans (CSOP): up to £30,000 worth of options
can be granted to any number of employees. Also offer NIC advantages.
- Enterprise Management Incentives (EMI): companies with gross assets up to
£30M can grant share options worth up to £120,000 per employee,
subject to total share value of £3M. Also offer NIC advantages.
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Criminal Records Disclosures
The initial cost to an organisation registering with the Criminal Records Bureau (CRB) is currently
£300
and each additional countersignatory costs
£5.00
The costs of disclosures are as follows:
- standard disclosure: £26.00
- enhanced disclosure:
£36.00
- checks are free for volunteers.
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Juror's financial loss allowances
Employees in England and Wales who undertake jury service are allowed to claim
the following allowances from the courts (the following rates apply as from 1.6.10 and
will not increase for 2011/12):
- During the first 10 days:
- 4 hours or less on any day: £32.47
- more than 4 hours on any day: £64.95
- From 11th day up to 200th day:
- 4 hours or less on any day: £64.95
- more than 4 hours on any day: £129.91
- From the 201st day:
- 4 hours or less on any day: £114.03
- more than 4 hours on any day: £228.06
Employees in Northern Ireland who undertake jury service may claim the same
rates as apply in England and Wales (see above) for the first 10 days and days 11-200,
but the enhanced rates that apply in England and Wales for day 201 onwards do not
apply in Northern Ireland.
As from 1 January 2011, slightly different rates apply to jurors in Scotland who are
able to claim the financial loss allowances, whether or not they actually serve on a jury,
in respect of loss of earnings or social security welfare benefits, and also any additional
expense (up to a limit) incurred in employing a childminder, other child carer, or carer
for a dependent adult which was necessary in order to attend the jury service. The
timescales are also now different, as follows:
- During the first 5 days:
- 4 hours or less on any day: £32.47
- more than 4 hours on any day: £64.95
- From 6th day up to 100th day:
- From the 101st day:
The maximum amount paid in respect of carer expenses is £6 per hour.
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Magistrate's allowances
The allowances for magistrates (reviewed with effect from 1 May 2009) are as
follows:
- for self-employed magistrates: £58.29 for a half-day sitting or up to
£116.58 for a full day sitting (over four hours)
- for employed magistrates: £46.63 for a half-day and £93.27 for a
full-day.
Data protection
As from 1 October 2009, the fees payable by data controllers to register or renew
with the Information Commissioner to process personal data are as follows:
- less than 250 employees: £35.00
- 250 or more employees, or private companies with an annual turnover of
£25.9 million or more: £500.00
The maximum amount that an individual can be required to pay to view his/her
personal data is £10.00.
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