Employers brace for uplift to the National Minimum Wage

 Workers across the UK will get a pay rise from April as higher National Minimum Wage (NMW) rates are introduced.

According to the Government, around two million of the UK’s lowest-paid workers will benefit from the rise in the National Living Wage (NLW) and NMW rates.

From April 2023, the NLW will increase by 92 pence per hour, or 9.7 per cent, to £10.42 whilst the NMW rates for younger workers will also increase.

Currently, the National Living Wage applies to those 23 and over, the age having been lowered from 25 in April 2021.

Those aged 21-22 will earn £10.18 an hour, a £1 rise, whilst 18–20-year-olds will receive £7.49 an hour, an increase of 66p.

Apprentices and 16 and 17-year-olds will receive £5.28 an hour, a 47p increase.

These rates are for the National Living Wage (for those aged 23 and over) and the National Minimum Wage (for those of at least school-leaving age).

The new rates are:

23 and over21 to 2218 to 20Under 18Apprentice
April 2022 (current rate)£9.50£9.18£6.83£4.81£4.81
April 2023£10.42£10.18£7.49£5.28£5.28

The Low Pay Commission estimates that there were two million workers paid at or below the minimum wage in April 2019, around seven per cent of all UK workers.

Certain organisations can claim the Employment Allowance (EA) to reduce their employer Class 1 National Insurance contributions. This upcoming tax year, 2023-24, the amount is £5,000, the same amount as it was last year.

If you do your own payroll, don’t forget to tick the message box when prompted to declare whether you are claiming the EA when you create a payroll data file for the new tax year. There are certain situations where companies are not eligible, so if you’re not sure, please get in touch.

However, if we manage your payroll, then please get in touch with us if you’d like to make any changes to your employees’ wage rates for the new tax year. We assess whether the employment allowance can be claimed each year.