Changes to the National Living Wage and National Minimum Wage

Accredited Supplier, Sones Accountancy Services provides a reminder about the rate changes to the National Living Wage and National Minimum Wage.

The Government has announced rate changes to the National Living Wage and the National Minimum Wage which will come into force from April 2024.  This will be the largest-ever increase to the minimum wage in cash terms. Also, the National Living Wage threshold has been lowered from age 23 years and over, to 21 years old and over.  Business owners should pay careful attention to which employees will be affected by the increases.

The National Living Wage is the statutory minimum hourly rate employers must pay workers aged 21 and over.  Whereas the National Minimum Wage is a statutory minimum hourly rate for workers under the age of 21. The purpose of minimum wages is to safeguard employees from unfairly low compensation.

From 1 April 2024, the rates will be as follows:

National Living Wage (aged 21 and over)

£1.02 increase from £10.42 to £11.44 per hour.

National Minimum Wage (aged 21 and under)

18 – 20 years old - £1.11 increase from £7.49 to £8.60 per hour.

16 – 17 years old - £1.12 increase from £5.28 to £6.40 per hour.

Apprentices - £1.12 increase from £5.28 to £6.40 per hour.

Business owners need to ensure they are prepared for the minimum wage increases and the lowering of the age thresholds.  Check now which employees will be affected so that you can calculate their new wages accurately. Consider how these increases will affect your profitability and think about whether you need to increase your prices or cut costs elsewhere, so the impact is lessened.

If you have any questions regarding how the National Living Wage and National rate rises will impact your business or about how to prepare for further cost increases, please do not hesitate to contact us: sonesaccountancy.co.uk/calendly-15-minute-call