Compliance
Top Employer Payroll Alerts for Businesses Before April 2026
From tax codes to payrolling benefits, employers need to be ready for significant payroll changes in April 2026—don’t get caught off guard.
By NomadicTax Research Team • 5-8 min read • February 21, 2026
## Key Payroll Changes Employers Should Know
Starting **6 April 2026**, several changes kick in that directly affect payroll processing and employee deductions. They include:
- Updates to **tax codes** for all employees, including new prefixes and emergency codes. Basic Personal Allowance remains £12,570.([gov.uk](https://www.gov.uk/government/publications/p9x-tax-codes/p9x-tax-codes-to-use-from-6-april-2026?utm_source=openai))
- New **Student Loan Plan 5** entering repayment, with specific repayment thresholds and rate structure. Employers will receive start notices in March 2026.([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-february-2026/february-2026-issue-of-the-employer-bulletin?utm_source=openai))
- Mandatory **payrolling of benefits in kind (BiKs)** and expense reporting being introduced in 2027-28; employers should register voluntarily ahead of that date.([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-february-2026/february-2026-issue-of-the-employer-bulletin?utm_source=openai))
- State Pension age increasing to **67 years**, affecting pensionable employee categories and NIC letters.([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-february-2026/february-2026-issue-of-the-employer-bulletin?utm_source=openai))
## Action Items for Employers
- **Update your payroll software**: Basic PAYE Tools will need version 26.0 from 6 April 2026. Ensure automatic updates are enabled.([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-february-2026/february-2026-issue-of-the-employer-bulletin?utm_source=openai))
- **Register for voluntary payrolling of BiKs** by 5 April 2026 if you wish to opt in ahead of the mandatory regime in 2027-28.([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-february-2026/february-2026-issue-of-the-employer-bulletin?utm_source=openai))
- **Inform staff** about changes: those reaching State Pension age between 6 April 1960 and 5 March 1961 will have their NI category letter updated.
- **Understand student loan thresholds and default plan**: In absence of a start notice, Plan 1 will apply until notice received, then default shifts to Plan 5 from 6 April.([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-february-2026/february-2026-issue-of-the-employer-bulletin?utm_source=openai))
## Examples & Implications
- A small firm with 8 employees using Basic PAYE Tools must upgrade their software by tax-year start, or risk using outdated codes or incorrect student loan deductions.
- An employer providing non-cash rewards (like vouchers) must account for tax & Class 1A NICs and decide whether to adopt a taxed award scheme—all reporting rules apply.([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-february-2026/february-2026-issue-of-the-employer-bulletin?utm_source=openai))
- Companies hiring qualifying veterans can benefit from reduced employer NICs up to certain thresholds—relief extended to 2028.([gov.uk](https://www.gov.uk/government/publications/budget-2025-overview-of-tax-legislation-and-rates-ootlar/budget-2025-overview-of-tax-legislation-and-rates-ootlar?utm_source=openai))
## Mitigating Risks
- Conduct a payroll health-check ahead of April 2026 to catch any software incompatibilities or misconfigurations.
- Keep documentation of employees’ birth dates for pension age eligibility; double-check NI category letters post-change.
- Train payroll staff on upcoming BiKs reporting.
## Takeaway
Payroll rules coming into force in April 2026 will affect tax code, student loan plans, benefit haircuts and employer record-keeping. Employers who begin adapting now—updating tools, educating staff, registering for future obligations—will find the transition smoother and less costly.