If you’re in business and directly employing minimum-wage workers – ie, you’re not just hiring casual freelances as and when you need them – you almost certainly already know their hourly rate of pay goes up next week. But just in case, here’s a reminder that the National Living Wage (formerly the National Minimum Wage) increases from £7.50 to £7.83 per hour from this Sunday. But that’s just the headline rate. There’s a range of different rates for different jobs and for different circumstances, so we thought we’d take this opportunity to summarise them here:
- This new increase applies to all employees aged over 25 and is a legal entitlement. (It also applies to agricultural workers in England unless their current employment dates from before October 2013, in which case they are entitled to the pay set under their contract of employment.)
- The government is aiming to push the hourly National Living Wage rate up to £9.00 by 2020.
- The hourly rate varies dependent on age:
| Year | 25+ Years | 21-24 Years | 18-20 Years | <18 Years | Apprentice * |
|---|---|---|---|---|---|
| April 2017 | £7.50 | £7.05 | £5.60 | £4.05 | £3.50 |
| April 2018 | £7.83 | £7.38 | £5.90 | £4.20 | £3.70 |
* Apprentices are entitled to the apprentice rate if they’re either aged under 19 or aged 19 or over and in the first year of their apprenticeship.
- There is no difference in the official National Living Wage rates for those people who live in London or other large cities compared to elsewhere in the UK.
The Real Living Wage
The Real Living Wage is a voluntary scheme to which more than 4,000 UK employers have already signed up that aims to recognise the actual cost of living in the areas where people live and work. The rates of pay under the scheme are recalculated every November according to the cost of living based on the changing cost of a basket of typical groceries. These rates are set by the Living Wage Foundation. Employers accredited under the scheme include banks, retailers, charities, local authorities, construction companies, NHS trusts, and just about every other type of organisation – large and small. Currently, the Real Living Wage is set at £10.20 per hour in London and £8.75 elsewhere for all directly employed workers aged 18 years or over.
For more information on payroll issues, call Vallery Lee on +44 1295 812714 or +44 7767 831403 between 09:00 and 17:30 weekdays or 09:00 and 12:00 Saturday mornings. (You can also email us using the message form here.)