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National Living Wage and National Minimum Wage increase in 2024

National Living Wage and National Minimum Wage increase in 2024

In welcome news for young workers and apprentices, minimum wage rates will increase substantially from 1st April 2024. However, this may put more pressure on employers who are already struggling in a difficult economic climate, as even small employers must pay the appropriate minimum wage.

Almost all workers in the UK are entitled to a minimum hourly pay rate known as the National Minimum Wage. The National Living Wage is a higher minimum pay rate currently available for workers over 23 years old, but this age limit will be reduced to 21 years old in the coming April.

Here are the changes to minimum wage rates that will take effect in a few months’ time.

New NLW and NMW rates from April 2024

The current and future rates for the National Living Wage (NLW) and the National Minimum Wage (NMW) , and the increases between them, are as follows:

WORKER AGE

CURRENT RATE

RATE FROM 01/04/24

INCREASE

23 and over

£10.42

£11.44

9.8%

21 to 22 years old

£10.18

£11.44

12.4%

18 to 20 years old

£7.49

£8.60

14.8%

Under 18 years old

£5.28

£6.40

21.2%

When it comes to apprentices, the minimum wage for workers under 18 years old applies, but only if the apprentice is 19 years old or under, or in the first year of their apprenticeship. Otherwise, employers must pay the appropriate rate for the apprentice’s age.

The only benefit that counts towards the NLW/NMW is provision of accommodation, with the maximum offset being £9.99 a day (or £69.93 a week) from this April.

What about the Real Living Wage?

The Real Living Wage (RLW) is an hourly rate of pay based on the cost of living, which is calculated independently and paid on a voluntary basis. Around 14,000 employers across the UK voluntarily pay the RLW, benefitting more than 460,000 employees.

The Real Living Wage is currently £12 an hour, close to the National Living Wage, but it applies to more workers from 18 years old. The RLW is also higher in London, where the costs of living and working in the capital city are higher, at £13.15 an hour.

Accounting and payroll services for employers

Employers can use the National Minimum Wage and Living Wage calculator on the government website to make sure they are paying an employee the right minimum wage, and to check whether an employee was underpaid in a previous year.

To ensure that employees are paid appropriately and in a timely manner, and avoid the problem of owing employees who have been underpaid, employers of any size can benefit from professional accounting and payroll services.

Here at gbac, our team offers a variety of financial services that can help businesses of all sizes, including bookkeeping, payroll, and tax management.

To find out what we can do for your business, get in touch with our accountants in Barnsley by phone or email today.

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