Not sure how much income tax to deduct from your employees? 

The amount of income tax you deduct from your employees depends on their tax code (https://www.gov.uk/employee-tax-codes) and how much of their taxable income is above their personal allowance (https://www.gov.uk/income-tax-rates/current-rates-and-allowances).

The tax thresholds and rates for England and Wales from 6 April 2021 up until 5 April 2022 are: -

Personal allowance

£242 per week

£1,048 per month

£12,570 per year



UK basic tax rate


20% on annual earnings above the PAYE tax threshold and up to £37,700


UK higher tax rate


40% on annual earnings from £37,701 to £150,000


UK additional tax rate


45% on annual earnings above £150,000


The thresholds are being frozen until April 2026.

There are different rates for Scotland.

The emergency tax codes from 6 April 2021 are:

  • 1257L W1
  • 1257L M1
  • 1257L X

To find out more about emergency tax codes please visit https://www.gov.uk/tax-codes/emergency-tax-codes.

For more detailed information on this, please visit https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2021-to-2022.