The National Minimum Wage is the minimum legal amount per hour a business can pay an employee in the UK. This amount is constantly under review by the UK government, who adjust the figure each year in line with the cost of living. They recently announced that the next minimum wage increase in the UK will take effect from 1st April 2023.
Although the minimum wage is set by an hourly amount, it is not limited to employees that are paid per hour. The rate applies to all workers across the UK, including:
- Those working part-time or casually.
- Workers in training.
- Offshore workers.
The new 2023 rates are the same across Scotland, Northern Ireland, Wales and England and will come into effect on the same date everywhere.
There are a few exclusions: Self-employed workers, unpaid volunteers, company directors and members of family cohabiting with their employer are not entitled to the minimum wage.
It's bumping up quite a bit this year. Here are the increases:
➡ Apprentice and U18 - £5.28 from £4.81 (9.8% increase)
➡ 18yo to 20yo £7.49 - from £6.83 (9.7% increase)
➡ 21yo to 22yo £10.18 - from £9.18 (10.9% increase)
➡ 23 and over - £10.42 - from £9.50 (9.7% increase)
This is basically a 10% increase across the board. Remember, even if you have employees who are way above the threshold, market pressures are likely to require a similar increase for them too.
Equally, if you have a structure where this increase applies to a junior member of staff, but does not necessarily impact a more senior team member, the more senior member is likely to expect an equivalent pay rise to maintain the difference between the grades.
If you'd like more information on how the increases will impact your business, talk to one of our expert accountants. Visit the Contact Us page to, erm, contact us.
