2023 is the year for change, with a new National Minimum Wage increase set to happen in April.
The National Minimum Wage is the minimum amount that employers are legally required to pay their employees, based on the employee's age. This amount is constantly in review and changes in April on years where an increase is deemed necessary. The ‘pay floor’ was created to protect low-paid workers without damaging the economy or jobs.
With the National Minimum Wage increasing in the next few months, at Venton our qualified accountants have looked into what these changes will be and how they might affect you.
What is the difference between National Minimum Wage and National Living Wage?
The National Minimum Wage and National Living Wage both create a payment floor for workers.
National Minimum Wage indicates the minimum hourly rate workers are entitled to be paid by their employers, whereas National Living Wage is a higher wage for workers over the age of twenty-three and is based on the current cost of living. National Living Wage is different in London to the rest of the UK to accommodate for the different costs of living in the area.
What is the New National Minimum Wage 2023?
From April 1st 2023 the National Minimum Wage will be increasing for all workers, with employers required to abide by these pay changes.
The increase will be as seen here:
This change sees a total increase rate of £1 or less, with those aged below eighteen going from £4.62 per hour to £5.28 and those over the age of twenty-three earning a national living wage of £10.42.
National Minimum Wage for Apprentices
National Minimum Wage for those undertaking an apprenticeship is slightly different. If you are an apprentice under the age of nineteen, or you’re over the age of nineteen but in your first year of the apprenticeship, you will receive the apprentice wage.
If you are over nineteen and no longer in your first apprenticeship year you are entitled to the correct National Minimum Wage for your age range.
What does the National Minimum Wage Change mean for you?
As an employee on National Minimum Wage you don’t need to do anything, you can expect to see the change to your wages from April 1st.
As an employer, you are required to pay your workers the minimum wage by the government. If it is discovered that an employer has not paid the national minimum wage the consequences from HMRC include issuing a notice to the employer to pay money owed, backdating up to six years worth of pay discrepancies. You could also receive a minimum £20,000 fine and legal action against your business. Keeping a record of your payroll and your compliance with National Minimum and Living Wages is the ideal way to show HMRC that you are doing right by your employees.
Keep your accounts Up To Date With Venton Today
Providing a real Living Wage to your employees can be more than just good for your employee’s financial well-being, it can also increase their motivation and dedication to your company, showing you care about your employees.
Have a question about national minimum wage changes? Contact our team to discuss your needs or browse our accountancy services today.
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