The National Minimum Wage Increase

Most employees are entitled to be paid the national minimum wage and the rate at which they are paid varies depending on their age.

From 1st October 2009, the national minimum wage for adults aged 22 and over increases to £5.80 per hour. The development rate increases for 16-17 year olds to £3.57 per hour and for those aged 18-22 to £4.83 per hour. The government has also promised to reduce the qualifying age for the adult minimum wage rate from 22 to 21 with effect from October 2010.

There are a few exceptions which apply to the above rates for a small minority of workers.  Currently, apprentices under the age of 19 are not entitled to the national minimum wage and apprentices between the ages of 19 and 25 are not entitled to the minimum wage in the first year of their contract.

For this purpose, apprentices are either workers who have contracts of apprenticeship, or workers who are taking part in specific training programmes which are funded by a local development agency. You must ensure you have a written agreement between you and your new worker which confirms they are employed on an apprentice contract.

For more information on whether or not your employee counts as an apprentice you should visit www.businesslink.gov.uk or speak to your local TaxAssist accountant.

Date published 5 Dec 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.