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Low Pay Commission

Increases to Minimum Wage
Increases to minimum wage 758 513 Stepping Stones Accountancy

Increases to minimum wage

April has bought a change in the national living wage; it has risen from £10.42 to £11.44 per hour. This applies to anyone who is 21 and over. The changes were announced during the Autumn statement and have now been introduced. Anybody who holds a full-time contract and is on minimum wage will now see an increase of £1,800 per annum.

A summary of these changes are as follows:

  • Apprentice: £6.40 (increase from £5.28)
  • Under 18: £6.40 (increase from £5.28)
  • 18 to 20: £8.60 (increase from £7.49)
  • 21+: £11.44 (increase from £10.18 for 21 to 22 and £10.42 for 23+)

The UK is stringent about the national living wage, and for the minimum amount a worker can be paid is set in law. No matter what the size of the business an employer cannot pay less than the minimum wage.

According to government figures, and thanks to ongoing rises, an employed person is earning more than £9,000 per annum compared to the same time in 2010.

Often people are unsure about the difference between national living wage and minimum wage. There is no difference, they both refer to the same thing. The confusion simply occurred with a change in name from minimum wage to national living wage.

Working out the rate of what the minimum wage should be is achieved through a simple process. Firstly, an independent organisation called the Low Pay Commission (LPC) will evaluate and then provide their recommendations on what they feel should be the minimum wage. In November the LPC will present their recommendations to the Government who will then review and decide on what the rate of minimum wage should be. When agreed the new rate is introduced in the following April. For anybody wanting to know more about minimum wage the Government have an excellent calculator that can be used – simply follow this link to find out more.

Finally, it is important to note that differences in the minimum wage might be likely if an employer is providing accommodation for its staff. When this occurs there is an accommodation offset that needs to be taken into consideration. In line with the recent increases in the minimum wage, there is also a change to the accommodation offset. It has risen this month to £9.99 per day (from £9.10 per day) or £69.93 per week. There are no other company benefits (e.g. company car, subsistence or childcare vouchers) that will have an impact on minimum wage.

If you have any questions regarding minimum wage or in fact any aspects of business accountancy, then our team can offer both help and support. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min

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