The Chancellor Jeremy Hunt confirmed at the 2023 Autumn Statement that the National Living Wage would increase to £11.44 per hour from April 2024 and be applicable for eligible workers aged 21 and over. This will create a pay rise for almost two million workers of 9.8%.
As an employer it’s very important to understand the different pay levels and keep up to date with the requirements.
What is the National Minimum Wage?
In 1999 the UK introduced its first national minimum wage. Over the years, the minimum wage in the UK has seen revisions to keep pace with inflation and changing economic conditions. The current hourly rates, as of April 2023 of the national minimum wage are:
|Apprentice||Under 18||18 to 20||21 to 22||23 and over|
The rate for employees aged 23 years and over is also known as the National Living Wage. The rate has previously been £9.50 per hour (April 2022-April 2023). The adjustment in April 2023 saw an increase of 9.7%.
All employers in the UK must use the National Minimum Wage rates as a minimum for all employees. Not paying minimum wage is a criminal offence and authorities will enforce penalties. It is important to rectify any discrepancies as soon as possible.
Who is entitled to the National Minimum Wage?
Every employee in the UK is entitled to the National Minimum Wage or National Living Wage. This includes employees on zero hours contracts and casual workers.
Those on work experience placements, student interns (without promise of future contract of work) and volunteering are not entitled to the National Minimum Wage.
What is the Real Living Wage?
The Real Living Wage is determined by the Living Wage Foundation and is based on the UK's cost of living. It is a voluntary benchmark that reflects the actual expenses required for a decent standard of living. It considers factors such as housing, food, transportation, and other essential needs. It's a guideline for employees aged 18 and over.
The Real Living Wage in the UK is currently £12.00 per hour, and the London Living Wage is £13.15. This is an increase of 10% on the previous rates.
What do employers need to do?
Employers need to:
- Check employee records are up to date
- Update hourly rates where an employee's position and age may move them to another bracket
- Check annually the increase in rates and apply them as such (from 1st April)
Date published 16 Nov 2023 | Last updated 22 Nov 2023This 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.
Catherine Heinen, FCCA
Catherine is a Technical Content Writer at TaxAssist Accountants, and a qualified accountant. With experience working at two accountancy practices in the UK top 50 accountancy firms according to Accountancy Age, Catherine has significant experience in accounts, tax returns and advising clients. Catherine ensures businesses, business owners and individuals are kept up to date and informed by providing concise and informative technical material.
Choose the right accounting firm for you
Running your own business can be challenging so why not let TaxAssist Accountants manage your tax, accounting, bookkeeping and payroll needs? If you are not receiving the service you deserve from your accountant, then perhaps it’s time to make the switch?
We specialise in supporting independent businesses and work with 80,684 clients. Each TaxAssist Accountant runs their own business, and are passionate about supporting you.
We enjoy talking to business owners and self-employed professionals who are looking to get the most out of their accountant. You can visit us at any of our 409 locations, meet with us online through video call software, or talk to us by telephone.
Changing accountants is easier than you might think. There are no tax implications and you can switch at any time in the year and our team will guide you through the process for a smooth transition.