What is the National Living Wage?

The National Living Wage will increase by 6.2% from £8.21 to £8.72 per hour from April 2020. For each member of staff working full time, this increase could cost an employer on average of over £930 per year. Workers aged 25 or over and who are not in the first year of an apprenticeship, are legally entitled to the National Living Wage.

National Minimum Wage rates

The National Minimum Wage rates from April 2020 will increase as stated below:

• A 6.5% increase from £7.70 to £8.20 for 21-24 year olds
• A 4.9% increase from £6.15 to £6.45 for 18-20 year olds
• A 4.6% increase from £4.35 to £4.55 for Under 18s
• A 6.4% increase from £3.90 to £4.15 for Apprentices

The new rate will apply to the next pay reference period that begins on or after the date:

• a rate increase begins
• an employee reaches a new age bracket.

For example:

An employee paid on the 25th of each month will start to receive the new rate of minimum wage from 26th April onwards as this is the start of the pay reference period beginning after the increase.

So, the employee will not see the increase in their wages until the pay date 25th May 2020.

If you want any help in this area, please get in touch with us today via020 3976 3868 or complete our contact form here and we can guide you through what needs to be done or discuss how we can do you payroll for you so you don’t need to worry about it.

Date published 28 Feb 2020 | Last updated 25 Sep 2020

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.