National Minimum Wage increase
Getting ready for the National Minimum Wage increase
All employers need to be aware that the National Living Wage (NLW) and National Minimum Wage (NMW) rates are increasing on 1 April 2024. In addition, the National Living Wage will be extended to workers aged 21 and over (previously only for age 23 and over).
All workers are legally entitled to be paid the National Minimum Wage (NMW). This includes temporary seasonal staff, who often work short-term contracts in bars, hotels, shops and warehouses over the summer or other periods. Employers who fail to pay the correct wage will be subjected to a penalty and may be named by the Government.
When introduced in April 2024, the new National Living Wage (NLW) for over-21s will be £11.44 an hour.
In full, the new rates that will apply from 1 April 2024 are:
- National Living Wage (21+) to increase from £10.42 to £11.44
- National Minimum Wage (18-20) to increase £7.49 to £8.60
- National Minimum Wage (16-17) to increase £5.28 to £6.40
- Apprenticeship Wage to increase from £5.28 to £6.40
HMRC have further information on their own website – https://www.gov.uk/national-minimum-wage
All businesses must therefore prepare for this change. In addition, it is worth remembering that an increase to the National Minimum Wage means additional costs to an employer, more than just the wages themselves. It is also an increase to associated costs, including National Insurance Costs (NICs) and holiday pay.
It may be worthwhile speaking to a financial expert to get a comprehensive overview of your accounts and to be sure, you can afford your new payroll obligations. We would also recommend investing in accounting software. This will provide a low-budget way to track your income, costs, and cash flow.
At GWA, we have a dedicated team able to deal efficiently with your entire payroll, employment and HR issues. If you would like to discuss these latest changes or ensure your salaries are processed correctly, please get in touch. We are here to help.
