Payroll Bulletin Q2 2026

As your trusted payroll adviser, we have compiled a summary of the key payroll updates across the UK, Ireland and the Crown Dependencies for Q2 2026 (April to June).

These changes are based on current guidance and will help ensure your payroll processes remain compliant as the new tax year begins in several jurisdictions.

Please note: this is not an exhaustive list. If you would like to discuss how any of the upcoming changes may affect your business, please contact us at payroll@offshoregroup.gg.

Guernsey

Given the stable nature of Guernsey payroll, there have been no key changes since those announced at the beginning of 2026.

However, it is worth noting that tax reform is currently under review, with decisions expected to be concluded during summer 2026. This reform is expected to include a restructuring of income tax bands, potential changes to Social Security and a realignment of allowances.

We will provide further guidance once the final outcome of the reform is confirmed.

Jersey

Given the stable nature of Jersey payroll, there have been no key changes since those announced at the beginning of 2026.

All existing guidance remains in effect and employers should continue to process payroll in line with the current rules.

United Kingdom

Q2 2026 marks the beginning of the new UK tax year, with several points for employers to be aware of.

Personal allowances remain frozen at £12,570 until 2031. As salaries rise over time, this means more employees may be brought into paying higher levels of tax.

Employee National Insurance remains at 8%, while employer National Insurance remains at 15%.

The National Minimum Wage for workers aged 21 and over increases to £12.71 per hour, representing a 4.1% rise. Other age bands will also increase, with some seeing uplifts of up to 6%. Employers should review pay rates to ensure ongoing compliance.

There are no changes to the existing income tax bands of 20%, 40% and 45%, and the related thresholds remain unchanged. Employment Allowance also remains at £10,500.

A new Student Loan Plan 5 will apply, with a repayment threshold of £25,000. Employers should ensure payroll systems are updated where relevant for affected employees.

It is also worth noting that this is the final year in which benefits in kind can be submitted via P11D forms. From April 2027, these benefits will need to be payrolled instead. Common examples of benefits in kind include company cars and private medical insurance. Employers may wish to begin preparing for this change in advance.

In addition, the state pension age is due to increase from 66 to 67, which remains an important long-term consideration for workforce planning and retirement communications.

Ireland

A major pension reform is being introduced in Ireland under the new auto-enrolment system, officially branded My Future Fund. This is one of the most significant changes to Irish payroll in recent decades.

Under the new system, eligible employees will be automatically enrolled into a pension arrangement if they are not already a member of a qualifying scheme. This removes the need for employees to opt in, as enrolment will happen by default.

Employees will generally be eligible if they are aged between 23 and 60, earn €20,000 or more per year and are not already contributing to a workplace pension through payroll.

The scheme operates on a three-way contribution model. The employee contributes, the employer must match that contribution and the government adds a top-up. Initial contribution rates will be 1.5% from the employee and 1.5% from the employer, with the state adding an additional top-up based on employee contributions.

Over the next ten years, contribution rates will gradually increase to 6% for both employees and employers.

Even where an employer does not currently offer a pension scheme, participation in the new system will now be required where eligible employees are concerned.

Employees may choose to opt out, but only after six months of participation. If they do so, their own contributions will be refunded, while employer and state contributions will remain invested. Employees may also be re-enrolled periodically, typically every two years.

Employees who are already members of a qualifying occupational pension scheme or PRSA will be excluded from auto-enrolment. However, employers should ensure that any existing arrangements meet the required minimum standards.

Isle of Man

The start of April 2026 marks the beginning of a new tax year in the Isle of Man, with several changes that employers should note.

The higher rate of income tax remains frozen at 21%, but it will now apply only to earnings above £23,500.

There has also been a significant increase in the personal tax allowance. This will rise by £2,250 for individuals and by £4,500 for jointly assessed couples.

The tax cap remains unchanged at £220,000.

For National Insurance, the Class 1 primary and secondary thresholds have increased from £8,736 to £9,152 per annum. The Class 1 lower earnings limit has also risen from £6,500 to £6,708.

In addition, the Class 1 upper earnings limit and the Class 4 upper profits limit have increased from £53,664 to £56,261. Employer National Insurance contribution rates remain unchanged.

New tax coding notices will be issued at the start of the tax year in April 2026, and employers should ensure payroll systems are updated accordingly.

Employers should also be aware that annual reporting forms T37, T14 and T09 are due for submission by 5 May 2026.

If you have any queries about how these updates may impact your organisation, or if you require support in updating your payroll processes, we’re here to help.

📧 Contact us at: payroll@offshoregroup.gg