Key employment statistics

National Minimum Wage

As from 1 October 2009 the rates are as follows:

• adult rate (for those aged 22 and over): £5.80 per hour
• youth rate (18-21): £4.83 per hour
• rate for those aged 16 and 17-year-olds: £3.57 per hour
• the maximum amount that can be offset where accommodation is provided is £4.51 per day.

Note that as from 1 October 2009, tips, service charges, gratuities and cover charges, whether discretionary or mandatory, no longer count towards the NMW.

As from 1 October 2010 the rates will increase as follows:

• adult rate (for those aged 21 and over): £5.93 per hour
• youth rate (18-20): £4.92 per hour
• rate for those aged 16 and 17-year-olds: £3.64 per hour
• apprentices not otherwise covered by the NMW: £2.50 per hour
• the maximum amount that can be offset where accommodation is provided will be £4.61 per day.

Please note:

• As from 1 October 2010, the age bands have changed: 21 year olds will now get the standard adult rate.
• The new apprentice rate does not apply to non-employed apprentices, who are currently exempt from the NMW and will continue to be so. The new rate will apply 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 already be paid the relevant higher rate.

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 2009 and unchanged in April 2010) is £79.15.

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.

Statutory Maternity Pay (SMP)

For employees who earn more than the Lower Earnings Limit:

Length of service	Maternity leave	SMP
Less than 26 weeks' service at the beginning of the 14th week before the Expected Week of Confinement (EWC)	Up to 52 weeks	No entitlement
26 weeks' service or more at the beginning of the 14th week before the EWC	Up to 52 weeks	Six weeks at 90% of earnings (even if this is less than the SMP weekly rate) and up to 33 weeks at £124.88 (from 4 April 2010) or 90% of earnings (whichever is less) The remaining 13 weeks are currently unpaid

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:

• 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.

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.

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:

• 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.

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 throughout.

Employer supported childcare

Employers can contribute up to £55 per week (£243 per month) towards childcare costs, free of tax and National Insurance contributions, 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 the Government has announced changes to the tax relief on childcare vouchers. The tax relief will be applied to all vouchers at the standard income tax rate of 20%, thus penalising higher rate taxpayers who have claimed the relief, but leaving the relief for basic rate tax payers. Parents who currently have childcare vouchers will not be affected as the change only applies to new entrants to the scheme from 2011. The government still has to confirm how the relief on National Insurance contributions will be affected, and also what happens to voucher users who switch jobs.

Week's pay

The maximum weekly wage used for calculating statutory redundancy payments, basic awards, and other statutory compensation is £380. This was increased for all dismissals taking effect on or after 1 October 2009. The limit on a week's pay will remain at this level until February 2011.

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 £380 (as from 1 October 2009).

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 £11,400 (as from 1 October 2009).

Tribunal awards

Compensation for unfair dismissal is made up of two elements: a basic award (similar to a redundancy payment - therefore a maximum payment of £11,400 as from 1 October 2009) and a compensatory award.

• A minimum basic award of four week's pay is made where a dismissal is regarded as automatically unfair under ERA 1996, s98A(i) 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.
• The 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 £4,700.
• The minimum basic award for dismissal or selection for redundancy on grounds related to union membership or activities is £4,700.
• The minimum compensation awarded for exclusion or expulsion from a trade union is £7,200 as from 1 February 2010 (previously £7,300).
• The minimum additional award for failure to comply with a tribunal's order to reinstate or re-employ an employee who has been unfairly dismissed is £9,880.
• The maximum additional award for failure to comply with a tribunal's order to reinstate or re-employ an employee who has been unfairly dismissed is £19,760.
• The maximum compensatory award a tribunal can award to an employee who brings a successful claim is £65,300 as from 1 February 2010 (previously £66,200). This brings the total potential liability for a normal unfair dismissal claim to £75,800 as from 1 February 2010 (previously £76,700).
• There is no limit on the amount of compensation for cases of whistleblowing, certain health or safety matters, or discrimination on grounds of race, sex, sexual orientation, religion or belief, disability or age.
• Guidance on injury to feelings awards in discrimination cases 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.

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.

Guarantee payments ("lay-off pay")

The guaranteed daily rate for employees who are laid off work under the Employment Rights Act 1996 is £21.20 as from 1 February 2010 (previously £21.50).

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.

Income tax

2010-11 tax year

• The personal allowance for the PAYE tax threshold is £6,475.
• The personal allowance for someone aged 65-74 is £9,490.
• The personal allowance for someone aged 75 and over is £9,640.
• The basic rate limit is £37,400. Tax is payable at 20% on earnings of £0 - £37,400.
• Thereafter, an individual will pay 40% tax up to £100,000. An individual's personal allowance will be reduced by £1 for every £2 of gross income he/she has above the income limit up to a maximum of the full amount of the personal allowance.
• A new rate of income tax of 50% will apply to taxable non-savings income and savings income above £150,000.

2011-12 tax year

• The personal allowance for the PAYE tax threshold will increase to £7,475.

Employees National Insurance Contributions (NICs)

Tax year 2010-11:

• The Lower Earnings Limit is £97.00 per week, £421 per month.
• The threshold after which NICs become payable is £110 per week.
• Employees' class 1 NIC rates are 11% on earnings between the threshold and upper earnings limit; and 1% on earnings above the upper earnings limit.
• The Upper Earnings Limit is £844 per week.

Tax year 2011-12:

Employees' class 1 NIC rates will be increased to 12% on earnings between the threshold and upper earnings limit; and 2% on earnings above the upper earnings limit.

The threshold for employers' National Insurance Contributions will rise by £21 per week above indexation from April 2011. The latest budget also promised a National Insurance Contributions holiday for new businesses which start-up in certain areas of the UK over the next three years. Businesses in the chosen regions will be exempt from up to £5,000 of class 1 employer NICs payments, for each of their first 10 employees hired in their first year of business.

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.

From 6 April 2012 the CO2 emissions bands will be reduced by 5gm CO2 per km. In addition, the current graduated table of company car tax bands will be extended down to a 10% band which will apply to company cars with CO2 emissions up to 99gm CO2 per km. "Qualifying low emissions cars" will therefore no longer exist as a separate category

For details of individual cars, click here.

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 a minimum of 15 to a maximum of 35 per cent and the percentage for alternative fuels and hybrid cars can be below 15 per cent with reductions.

To calculate the benefit charge on free fuel the percentage figure will be multiplied against a set figure of £16,900 (£18,000 from April 2010).

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 £500 (£550 from April 2010) applies where fuel is provided for private mileage.

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: 40p per per mile
• 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)

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 increased with effect from 1 June 2010. 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:

• up to 1400 cc:
  • petrol: 12p
  • diesel: 11p
  • LPG: 8p

• 1401 - 2000 cc:
  • petrol: 15p
  • diesel: 11p
  • LPG: 10p

• over 2000 cc:
  • petrol: 21p
  • diesel: 16p
  • LPG: 14p

Future changes are scheduled to take effect twice a year, on 1 June and 1 December. Note: petrol hybrid cars are treated as petrol for this purpose.

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.

Termination payments

The following termination payments are tax-free:

• statutory redundancy pay
• non-statutory redundancy pay up to £30,000
• 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 up to £30,000.

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).

State retirement pension

The full basic state retirement pension for a single person for the 2010-11 tax year is £97.65 for a single person and £156.15 for a married couple.

The basic State Pension will be increased by linking to earnings or prices or by 2.5%, whichever is highest, from April 2011.

Occupational pension schemes

There are two limits on an individual's tax-relieved pensions savings, in the form of an annual and lifetime allowance.

For 2010/11 the allowances are:

• annual allowance: £255,000
• lifetime allowance: £1,800,000

From 2011-12 to 2015/16 the allowances will be frozen at:

• annual allowance: £255,000
• lifetime allowance: £1,800,000

Starting in 2011-12, tax relief on pension contributions will be restricted to basic rate for individuals with an annual gross income (including employer pension contributions) of £150,000 or higher and who, in addition, have gross income (excluding employer pension contributions) of not less than £130,000.

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.

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.

Criminal Records Disclosures

The initial cost to an organisation registering with the CRB is currently £300 and each additional countersignatory costs £5.00.

The costs of disclosures are as follows:

• standard disclosure: £26.00 (as from 1 October 2009)
• enhanced disclosure: £36.00 (rate remains unchanged)
• POVA/first check: £6.00 (rate remains unchanged)
• checks are free for volunteers.

Under the Safeguarding of Vulnerable Groups Act 2006, as from November 2010, individuals wishing to work with vulnerable groups will need to be registered with the ISA scheme and there will be a charge for this of £64.00 (£58 in Northern Ireland). The fee will consist of two components: an ISA registration fee of £28.00 and a CRB enhanced disclosure, currently £36.00. Registering with the scheme will however be free of charge for volunteers. Registration is portable so those transferring from one employer to another will not be required to re-register. Employers will not be charged for checking individuals' registration.

Juror's financial loss allowances

Employees on jury service are allowed to claim the following allowances from the courts (the following rates apply as from 1.6.10):

• 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

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.