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Configure manual rate changes for year end

Set the manual rates for the new tax year.

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Written by Onyema Onyejekwe
Updated this week

Once you've processed your payroll year end, there are some legislation rates that you need to update manually. To do this, follow the steps in portal for each section below.

📌Note: You need to ensure the rates in your software match the rates on HMRC's website.

Apprenticeship levy

Before processing your first payroll for the new tax year, the following rates need to be configured. To update the apprenticeship levy rates, follow the steps below.

  1. Click Settings then under UK Tax Rates, click General.

  2. Click Other then, from the Select Detail drop-down menu, double-click Apprentice Levy.

  3. In the Tax Year field, enter the current year.

  4. Amend the rates as required then click Save.

  5. Under Select, click Company Parameters.

  6. Set the threshold and pay code for each company in your organisation.

  7. Click Save.

Employment allowance

To update the employment allowance (EA), which allows eligible businesses and charities to reduce their employer's class 1 NIC liability, follow the steps below.

📌Note: For April 2026, the maximum EA will remain at £10,500. You need to check you qualify for Employment Allowance before you enable it in PeopleXD Payroll.

  1. Click Settings then under UK Tax Rates, click General.

  2. Click RTI then, from the Select Detail drop-down menu, select Company Allowance.

  3. For each company you need to claim for, under Employee Allowance, select Yes.

  4. The Employer Sector for State Aid Rule is no longer reported to HMRC and has been removed from the RTI schema by HMRC.

  5. Click Save.

Statutory rates and emergency tax code

📌Note: The weekly rate for all parental payments increases from £187.18 to £194.32 from 6 April 2026. If the employee qualifies for National Insurance compensation, the compensation rate increases from 8.5% to 9%. If the employee does not qualify, leave the NIC Compensation Percentage field blank.

To update the new current and previous year statutory rates, follow the steps below.

  1. Click Settings then click General.

  2. Under General, update the following fields:

    • Current Year Statutory Rate.

    • Previous Year Statutory Rate.

    • Emergency Tax Code.

    • NIC Compensation Percentage.

    • Default Tax Codes.

  3. Click Save.

Student and postgraduate loans

To update the new student loan plan thresholds, first review the pay code thresholds.

Plan type

Annual threshold

Monthly

Weekly

Rate

Plan 1

£26,900

£2,241.66

£517.30

9%

Plan 2

£29,385

£2,448.75

£565.09

9%

Plan 4

£33,795

£2,816.25

£649.90

9%

Plan 5 (NEW)

£25,000

£2,083.33

£480.76

9%

Postgraduate

£21,000

£1,750

£403.84

6%

After reviewing the pay code thresholds, update the student loan thresholds.

Student loan plan 1

To update the new student loan plan 1 thresholds, follow the steps below.

  1. Click Settings then under Codes, click Pay Codes.

  2. Search for the relevant student or postgraduate loan pay code.

  3. Click the three-dot icon then click Edit.

  4. Click step 2 Rules then search for the student loan rules.

  5. To update the values, click Edit.

    • The 2026/27 threshold for Student Loan Plan Type 1 is £26,900.

    • This is a weekly threshold of £517.30 and a monthly threshold of £2,241.66.

  6. Click Next then click Save.

Student loan plan 2

📌Note: From 6th April 2026, the Department of Education has confirmed that the threshold for Student Loan Plan Type 2 will remain at £29,385. The repayment percentage will still be 9%.

This results in a weekly threshold of £565.09 and a monthly threshold of £2,448.75.

To update the new student loan plan 2 thresholds, follow the steps below.

  1. Click Settings then under Codes, click Pay Codes.

  2. Search for the relevant student or postgraduate loan pay code.

  3. Click the three-dot icon then click Edit.

  4. Click step 2 Rules then search for the student loan rules.

  5. To update the values, click Edit.

    • The 2026/27 threshold for Student loan plan type 2 remains £29,385.

    • This is a weekly threshold of £565.09 and a monthly threshold of £2,448.75.

  6. Click Next then click Save.

Scottish student loan plan 4

📌Note: From 6th April 2026, the Department of Education has confirmed that the threshold for Scottish Student Loan Plan Type 4 is £33,795. The repayment percentage will be 9%.

This is a weekly threshold of £649.90 and a monthly threshold of £2,816.25.

To update the new Scottish student loan plan 4 thresholds, follow the steps below.

  1. Click Settings then under Codes, click Pay Codes.

  2. Search for the relevant student or postgraduate loan pay code.

  3. Click the three-dot icon then click Edit.

  4. Click step 2 Rules then search for the student loan rules.

  5. To update each threshold, click Edit.

    • The 2026/27 threshold for Scottish Student Loan Thresholds Plan 4 is £33,795.

    • This is a weekly threshold of £649.90 and a monthly threshold of £2,816.25

  6. Click Next then click Save.

Scottish student loan plan 5

📌Note: From 6th April 2026, the Department of Education has confirmed that the threshold for Scottish Student Loan Plan Type 5 is £25,000. The repayment percentage remains at 9%.

This is a weekly threshold of £480.76 and a monthly threshold of £2,083.33.

To update the new scottish student loan plan 5 thresholds, follow the steps below.

  1. Click Settings then under Codes, click Pay Codes.

  2. Search for the relevant student or postgraduate loan pay code.

  3. Click the three-dot icon then click Edit.

  4. Click step 2 Rules then search for the student loan rules.

  5. To update each threshold, click Edit.

    • The 2026/27 threshold for Scottish student loan thresholds plan 5 is £25,000.

    • This is a weekly threshold of £480.76 and a monthly threshold of £2,083.33.

  6. Click Next then click Save.

Postgraduate loans

📌Note: The Department of Education has confirmed that the Postgraduate Loan for the 2026/27 tax year remains £21,000. The repayment percentage remains at 6%.

To update the new post graduate loan thresholds, follow the steps below.

  1. Click Settings then under Codes, click Pay Codes.

  2. Search for the relevant student or postgraduate loan pay code.

  3. Click the three-dot icon then click Edit.

  4. Click step 2 Rules then search for the student loan rules.

  5. To update each threshold, click Edit.

    • The postgraduate loan threshold for 2026/27 remains £21,000.

    • £1,750 a month and £403.84 a week

  6. Click Next then click Save.

Council tax

To set up the required council tax rates for the new tax year, follow the steps below..

  1. Click Year End then click System Legislative Rates.

  2. Click Council Tax Rates.

  3. From the Pay Code drop-down menu, select the council tax pay code.

  4. Update the rates as per your local council tax rates then click Save.

Direct earnings attachment (DEA) and deduction from earnings order (DEO)

To set up direct rates for the new tax year, follow the steps below.

  1. Click Settings then under Codes, click Pay Codes.

  2. Search for the relevant DEA or DEO pay code.

  3. Click the three-dot icon then click Edit.

  4. Click Payment Orders then enable the Nett Earnings toggle.

  5. Update the rates as required then click Next twice.

  6. Click Save.

When you do this, the Nett Earnings indicator calculates as council tax, which excludes non-taxable earnings. You need to disable the indicator after you've saved the new rates. To do this, follow the steps below.

  1. Click Settings then under Codes, click Pay Codes.

  2. Search for the relevant DEA or DEO pay code.

  3. Click the three-dot icon then click Edit

  4. Click Payment Orders then turn off the Nett Earnings toggle.

  5. Click Next twice then click Save.

Scottish arrestment order

To set up the Scottish arrestment pay order rates for the new tax year, follow the steps below.

  1. Click Settings then under Codes, click Pay Codes.

  2. Search for the Scottish Arrestment Order pay code.

  3. Click the three dot icon then click Edit.

  4. Click Payment Orders then update the rates.

  5. Double-click Next then click Save.

Maximum redundancy rate

To review the maximum redundancy rates for the new tax year, follow the steps below.

  1. Click Settings then under UK Tax Rates, click General.

  2. Under Redundancy, update the rates then click Save.

Auto-enrolment thresholds

📌Note: The following auto‑enrolment LEL/UEL thresholds apply for the 2026/27 tax year:

  • QEB lower limit: £6,240 (LEL)

  • QEB upper limit: £50,270 (UEL)

  • Earnings trigger: £10,000

You need to review and update any pension scheme rates for the new tax year, including:

  • Lower earnings limit (LEL) and upper earnings limit (UEL) thresholds.

  • Banded scheme type tiered rates.

To do this, follow the steps below.

  1. Click Settings then under Codes, click Pension Schemes.

  2. From the Pension Code drop-down menu, select a pension scheme.

  3. Click Next then click LEL/UEL.

  4. Update the Annual LEL and Annual UEL fields as required.

  5. Click Save.

Employee tax codes

Depending on whether there are changes you may need to uplift tax codes for all or some of your employees.

📌Note: You need to do this before you load tax certs from HMRC.

National minimum wage

Starting from April 2026, the national minimum wage and national living wage will increase, as shown in the table below:

21 and Over

18 to 21

Under 18

Apprentice

April 2026

£12.71

£10.85

£8.00

£8.00

📌Note: The national living wage will be set at £12.71, while the London living wage will rise to £14.80. Since the system allows for only one living wage rate to be entered, please ensure that the London living wage is used where applicable in checks.

HR admin wage warning

If you use the HR admin wage warning or the payroll minimum wage validation report, you need to update the Wage Warning Setup to include the new rates. To do this, follow the steps below.

  1. From the dashboard menu, click People Management Dashboard.

  2. Click Data Centre then click View All.

  3. Under Organisation Rules, click Wage Warning Setup.

  4. Add the new rates to the following tabs:

    • Minimum Wage.

    • Living Wage.

    • Apprentice Wage.

  5. Click Save.

RTI payment pay codes

RTI requires reporting on specific types of payments. To check the correct reporting requirements, follow the steps below.

  1. Click Settings then click General.

  2. Click RTI then from the Select Detail drop-down menu, select Payment Pay Codes.

  3. Highlight the relevant pay codes then for each type of payments, turn on the indicators if applicable.

  4. Click Save.

Related Articles
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2026/27 year end software changes
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Check preloaded 2026 rates
Review rate and software changes for 2026
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