Every April, the new tax year arrives. For payroll teams, it brings a long list of changes. Some are small. Some are not. Either way, you need to get the basics ready for the first run. Here is a simple checklist businesses should work through before the new tax year begins.
1. Apply new tax codes
Make sure updated PAYE tax codes are loaded into your payroll system. Do this before the first payroll run of the new tax year. Test them if possible.
2. Update National Insurance thresholds and rates
Check that your payroll software reflects the new National Insurance thresholds and rates from 6 April. Most systems update automatically, but it still needs checking.
3. Implement National Minimum Wage and National Living Wage increases
Review all pay rates. This is especially important for hourly workers and younger employees.
4. Review pension auto-enrolment settings
Check that contribution rates are correct. Confirm the qualifying earnings bands are updated. Review any postponement settings to make sure they still apply.
5. Reset statutory payment calculations
Make sure that new rates for Statutory Sick Pay, Statutory Maternity Pay and Statutory Paternity Pay are active in your system.
6. Check student loan and postgraduate loan thresholds
Employees may be on different repayment plans. Confirm the correct plan types are applied. Check that updated repayment thresholds are in place.
7. Prepare P60 reporting
Make sure year-end payroll submissions are complete. Plan how P60s will be issued and when. Employees must receive them by 31 May.
8. Review how benefits-in-kind are handled
Decide whether benefits will be payrolled or reported separately. If you payroll benefits, systems must be ready from the first payroll of the tax year.
9. Test payroll software updates
Run a test calculation if possible. Some teams run a parallel payroll to check figures. Catch errors before they reach employees.
10. Tell employees what is changing
Proactively explain pay rate changes, tax code updates, or pension adjustments to reduce queries.
If your payroll team is small but your workforce is not, getting the new tax year right matters. Lucas White works with businesses that need practical payroll support at busy times of year. Happy to have a conversation.
