Payroll dates – what affects what?

PAYadvice.UK sees a number of social posts and questions around the effective payroll dates when crossing from the 2024/2025 tax year into the new 2025/2026 tax year.

Most recently have related to poor business planning by some employers on the impacts of National Insurance increases relating to work undertaken in March 2025 or earlier which is being paid on or after 6th April 2025 once the new tax year has started. The employer is lamenting the claimed unexpected impact of the reduction. To the secondary threshold and also the increase in secondary NI employer liabilities. They are requesting payroll managers call HMRC and somehow obtain agreement for the prior year threshold and rates to be applied!

So when does the tax year start?

Unlike other nations that apply 1st January as the new tax year, the UK retains the former traditional New Year’s Day for tax purposes as 6th April which has been applicable since 1800.

So does that application date point apply to everything payroll?

Simply the answer is NO!

For various pieces of payroll related legislation , there are different applicable dates although this year aligns more than some to a single aligned date point (often by coincidence),

There isn’t a single piece of legislation that defines pay points and effective dates, there are layers of differing legislation that have different application definitions and rules.

Operation of PAYE for Income Tax, National Insurance and associated items

So for Income Tax and National Insurance Contributions, the applicable dates for change relates to contractual payments due on or after 6th April 2025. When the work generating the payment occurred has limited relevance. Point of payment is key.

As a general rule, both National Insurance contributions and PAYEare operated when a payment of earnings is made to an employee.

CWG2 section 1.3

The other payroll related items that can align with this also are:

• The change in student loan and post graduate loan thresholds
• If the employer chooses, the start of the pension auto enrolment pay reference period may align with the start date of the associated payment tax period, however, this is dependent on employer pension scheme choice

What is relevant is the point of payment compared with 6th April

So what about other payroll related legislation?

Statutory Sick Pay (SSP)

The payment of SSP doesn’t relate to the point of payment but more to the point of sickness occurring, although the uplifted rate does apply from 6th April annually, the new rate applies to sick days in payment from that point in time. So a pay period could be partly at both old and new SSP rates. The principle of point of payment does not apply.

Statutory payment for parental related leave

The change in rates for:

• Statutory Maternity Pay (SMP)
• Statutory Adoption Pay (SAP)
• Statutory Paternity Pay (SPP)
• Shared Parental Pay (ShPP)
• Statutory Parental Bereavement Pay (SPBP)
• Statutory Neonatal Care Pay (SNCP)

Have an annual change point of the first Sunday in April. Although that also aligns with 6th April in 2025, often it doesn’t. Also a pay point of 6th April onwards could include statutory payment weeks that started before the rate change points and some weeks which are from or after the rate change point. The point of payment is not relevant but the coverage period of the statutory payment.

The 2025 alignment of 6th April 2025 for this years rate change point is coincidental.

National Minimum Wage and National Living Wage

The change point is set annually as the 1st April and relates to when the start of a pay reference period commences and applies to the whole pay period. This is not the point of payment recorded for HMRC PAYE purposes. Employers, of course, can always choose to exceed statutory minimums.

Under aspects of regulation 9, the rate applied aligns with the point of work being undertaken except where the payment is late by over 1 period unless the employee completed and submitted their timesheet late.

This can result in many individuals not receiving the new minimum pay rate until the following pay period such as the May pay day. Point of payment has limited to no relevance to minimum wage legislation as the deciding factor is the period start point.

Attachment and Earnings Arrestment

The effective date of changes to Attachments and Arrestments are those set in the variety of associated legislation. For example, the recent change to Scottish Earnings Arrestments is coincidentally associated with 6th April 2025, but is only typically changed every three years. More frequent changes have occurred over recent years.

Not all will change or be applicable from 6th April when they do change, however, the decision factor for change application is the point of payment and not when work was undertaken.

For the latest change to Scottish Earnings Arrestments see:

For other AEOs, DEOs, DEAs, CTAEO etc, these have not been changed in 2025.

Pension Auto Enrolment (aligned to PRP not tax period)

Where an employer has not chosen to align their Pension AE Pay Reference Period with the start of the tax period, then in the first period in April where the PRP start date is before 6th April, the former year rules apply in relation to banded earnings. it is not the point of payment although it is required that the payment point must fall within the PRP being applied.

This can result for the April pay period where the PRP is before the change point in the prior year thresholds being applied.

This anomaly has been hidden or masked over recent years as changes to threshold have been frozen. An area to look out for in the future as the relevant minister does have the ability to lower further or remove the Lower level of qualifying earnings for Pension AE to kick in from pound one.

What about holiday pay?

As holiday pay relates to not working the payment is not subject to National Minimum Wage scrutiny.

However, for those subject to the requirements for a 52 week paid earnings average, the averaging period starts on the prior Saturday to the leave commencement date. It dies not rebate strictly to the point of payment, for Northern Ireland the averaging period remains at 12 weeks.

For the new Holiday Hours Accrual and Rolled Up Holiday applicable to irregular hours and oars year workers, the new rules can apply for holiday years commencing on or after 1st April 2024. The 6th April has limited to no relevance.

Summary of impact dates for payroll

The following table highlights the payroll item, its applicability date and whether that aligns with the Point Of Payment or some other point in time within the relevant pay cycle – there are differences as each is covered by different legislative requirement layers and are covered by multiple different government departments across:

• HM Revenue and Customs (HMRC)
• Department for Business and Trade (DBT)
• Department for Work and Pensions (DWP)
• HM Courts and Tribunals Service (HMCTS) and the Scottish Parliament
• Etc.

What?	What effective date?	What judgement change point?
Income Tax	6th April	Point of Paymemt
National Insurance	6th April	Point of Payment
Student and PostGraduate Loans	6th April	Point of Payment
Statututory Sick Pay (SSP)	6th April	Point of Sickness
Statutory Maternity Pay (SMP)	1st Sunday in April	Point of parental leave week start
Statutory Adoption Pay (SAP)	1st Sunday in April	Point of parental leave week start
Statutory Paternity Pay (SPP)	1st Sunday in April	Point of parental leave week start
Shared Parental Pay (ShPP)	1st Sunday in April	Point of parental leave week start
Statutory Parental Bereavement Pay (SPBP)	1st Sunday in April	Point of parental leave week start
Statutory Neonatal Care Pay (SNCP)	1st Sunday in April (commencing 6th April 2025)	Point of parental leave week start
National Minimum Wage and National Living Wage	1st April	Start of the NMW Pay Reference Period being on or after
Pension Auto-Enrolment	6th April	Dependency on employer choice of Pay Reference Period (PRP) start: – Matching start of tax period so 6th April, or – Start point of the PRP if not matching the tax period
Attachment of Earnings Orders and Earnings Arrestments	Stipulated start point within regulations – this can vary and is not necessarily annual	Point of payment
Holiday Average Weekly Earnings	Rolling 52 week earnings average (12 weeks for Northern Ireland)	Saturday prior to the start of the holiday leave period

So could an employer fiddle the dates to reduce certain liabilities?

With some advanced planning there are potential opportunities to bring forward or delay payments, however, it is too late to moved payment which are made now to a former payroll point that has already passed.

Applying old calculation rules to payment paid from 6th April 2025, even if it relates to predated and completed work would be an avoidance measure that would not work.

PAYadvice.UK 16/4/2025