The National Minimum Wage is set by the Government based upon advice from the Low Pay Commission.
The current National Minimum Wage rates are:
Aged 23+ (National Living Wage) £10.42
21 – 22 Years old £10.18
18 – 20 Years old £7.49
16 – 17 Years old £5.28
Apprentice Rate £5.28
National Minimum Wage calculations can be complicated and are used to work out an hourly wage for an employee. The wage is based on money for hours worked and can simply be an hourly rate for an hourly paid employee but other items can be taken into account.
There is an HMRC calculator for employees to check their rates but it is not necessarily very simple to use.
Deductions also can be considered in a National Minimum Wage calculations and this can include deductions for things like uniform or employee purchases. Salary sacrifice arrangements will also reduce the amount to be used in the calculation and great care needs to be taken if lower paid workers enter into these arrangements.
The rates increased a lot this tax year and employers need to take care. HMRC are running webinars on National Minimum Wage for salaried workers this month and there is an expected introduction of an RTI (Real Time Information – reported to HMRC) reporting requirement for hours worked next April.
Check the hourly rates of your workers now.
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