April sees a number of increases to the national minimum wage, do you know the effects this will have on your payroll?

What is the National Minimum Wage?

Almost all workers are entitled to a minimum amount per hour, dependent on their age. Workers over 25 are instead entitled to the higher National Living Wage. The National Minimum/Living Wage does not apply to a small number of workers, so you should check the HMRC list if you have queries about the entitlement of any of your workers. Failure to pay your workers the applicable hourly rate is a criminal offence, if you discover that you have been paying below this you must pay any arrears immediately. There’s no exemption for small businesses, if you employ staff you need to pay them the National Minimum/Living Wage.

What are the new rates?

The rates increase each April and you should make sure that you familiarise yourself with them in order to make sure you continue to meet your obligations:

25 and over21 to 2418 to 20Under 18Apprentice
Current£7.20£6.95£5.55£4.00£3.40
April 2017£7.50£7.05£5.60£4.05£3.50

In order qualify for the apprentice rate workers must be under 19, or in the first year of their apprenticeship if 19 or older (those in their second year are eligible for the rate applicable to their age).

What do I need to do?

Review the wages of your staff to check that they meet the new rates, if they are lower than the new amounts you will need to ensure that these are raised from April. If you have any concerns about whether you’re paying your staff the correct amounts you can use the handy calculator on the HMRC website to check that you’re paying what you should.

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