Payroll Year End checklist: Preparing for 2025 

With April approaching, it’s time to tackle one of the most important tasks of the year—Payroll Year End (PYE).

Whether you’re a seasoned payroll professional or tackling it for the first time, Payroll Year End can bring its fair share of challenges.

Don’t worry! This blog covers everything from the basics to upcoming legislative changes.

What is Payroll Year End?

UK Payroll Year End is the end of the tax year for payroll purposes, where you submit your final submission to HM Revenue & Customs (HMRC).

Note: In the UK, the tax year is from April 6th of one year to April 5th of the following year.

Your main PYE responsibilities include:

• Reporting to HMRC on the previous tax year (ending on April 5th)
• Providing employees with their P60
• Preparing for the new tax year, which starts on April 6th

The goal of end-of-year payroll is to ensure you and your employees have accurate tax information for the preceding tax year.

Payroll Year End dates 2025

Payroll Year End has a number of important dates you need to be aware of, including:

• On or before your employees’ payday: send your final FPS payroll report of the year
• From April 6th: update employee payroll records
• From April 6th: ensure your payroll software is updated
• By May 31st: give your current employees a P60
• By July 6th: submit your final report of employee taxable expenses and benefits if they aren’t being processed through payroll
• By July 19th: pay Class 1A National Insurance Contribution (NIC) on P11D expenses and benefits via cheque
• By July 22nd: pay Class 1A NIC on P11D benefits electronically

Payroll Year End 2025: Legislative changes

Payroll Year End 2025 brings a range of legislative changes you need to be aware of.

See the upcoming legislative changes below.

2025-2026 National Minimum Wage (NMW) and National Living Wage (NLW)

The National Minimum Wage and National Living Wage (NLW) are the minimum pay per hour almost all workers are entitled to by law.

These rates apply from 1 April 2025.

Use the National Minimum Wage calculator to check if you’re paying a worker the National Minimum Wage or if you owe them payments from past years.

Note: You can see rates for previous years here.

Income tax changes for England and Northern Ireland

Income tax changes for Scotland

Income tax changes for Wales

2025-2026 National Insurance (NI) changes by pay period

Employer and employee contributions for 2025-2026

Summary of National Insurance changes for 2025/2026

National Insurance is seeing a wide array of changes, including:

• The rate of employer’s National Insurance Contributions (NICs) will rise by 1.2%, bringing it to 15%
• The Employer’s NI Secondary Threshold will decrease from £9,100 to £5,000. This change, alongside the rate increase, means a higher NI burden for many businesses
• The Employment Allowance will increase from £5,000 to £10,500, and the current £100,000 threshold for eligibility will be removed. All other eligibility requirements remain unchanged
• Income tax and NI thresholds, currently frozen, are not set to extend beyond the 2028/29 fiscal year
• Employer’s NI relief for employing veterans has been extended for an additional fiscal year, continuing the support for businesses employing veterans

Employment Allowance changes 2025/2026

Employer’s NI Secondary Threshold will decrease from £9,100 to £5,000.

This change, alongside the rate increase, means a higher NI burden for many businesses.

The Employment Allowance will increase from £5,000 to £10,500, and the current £100,000 threshold for eligibility will be removed.

All other eligibility requirements remain unchanged.

2025-2026 Statutory Payment rates

These rates apply from April 6^th 2025.

Use the maternity, adoption and paternity calculator for employers to calculate your employee’s:

• Statutory Maternity Pay (SMP)
• Paternity or Adoption Pay
• Qualifying week
• Average weekly earnings
• Leave period

Statutory Changes: Statutory Neonatal Care Pay

Neonatal Care Leave will apply to parents of babies who are admitted into neonatal care up to 28 days old and who have a continuous stay in hospital of 7 full days or longer.

These measures will allow eligible parents to take up to 12 weeks of leave (and, if eligible, pay) on top of any other leave they may be entitled to, including maternity and paternity leave. 

Real-Time Information (RTI) submission changes

For Full Payment Submissions (FPS), the following is changing:

• Neonatal Care values now included in the FPS submission each period
• NI Letters – If employee is on NI letter F,I,L,S,N,E,D or K then Employee Workplace Postcode must be present
• NI Letter – NI letter cannot be B, E, I or T if employee DOB is after 5/4/1961

For Employer Payment Summary (EPS), the following is changing:

• SNCP recoverable amount added to submission along with compensation amount for those claiming Small Employers Relief

Student Loan and Postgraduate Loan Rates and Thresholds 2024 to 2025

The Plan Type 1 annual threshold for 2025 to 2026 is £26,065.00 and the pay frequency/pay period equivalents are:         

The Plan Type 2 annual threshold for 2025 to 2026 is £28,470.00 and the pay frequency/pay period equivalents are:         

The Plan Type 4 annual threshold for 2025 to 2026 is £32,745.00 and the pay frequency/pay period equivalents are:         

Postgraduate Loan (PGL) annual threshold for 2025 to 2026 is £21,000 and the pay frequency/pay period equivalents are:  

How IRIS can help

As a trusted software provider, we have a wide array of payroll solutions which can suit the needs of any business.

Whether you want software to manage payroll in-house or would prefer to outsource the responsibility, we have you covered.

Payroll Year End: Frequently Asked Questions (FAQs)

Q: What should be in your payroll year end submission?

As part of your Payroll Year End process, the final submission you submit should contain information such as your Full Payment Submissions (FPS) and Employer Payment Summary  (EPS).

Q: When is the Payroll Year End deadline?

In the UK, the HMRC deadline for payroll year end falls on April 5, marking the conclusion of the tax year.

Q: What happens if I miss the Payroll Year End deadline?

Missing the UK Payroll Year End deadlines can lead to penalties from HMRC. It’s important to submit all.

Q: What is a P60, and who needs to receive it?

P60s are an end-of-tax-year summary of an employee's earnings and deductions, such as National Insurance contributions.

Businesses are required to provide all employees who were on the payroll at the end of the tax year a P60s.