The National Minimum Wage will increase from 1 October 2016. The increase is following the Government’s decision to accept recommendations from the Low Pay Commission (LPC) earlier in the year.
The main National Minimum Wage rate (for 21- 24 year olds) will rise by 3.7% from £6.70 to £6.95 per hour.
The new October 2016 National Minimum Wage rates
The National Minimum Wage rates will increase from 1 October 2016 as follows:
|Current rate||Rate from 1 October 2016|
|25 year old and over||£7.20||£7.20|
|21-24 year olds||£6.70||£6.95|
|18-20 year olds||£5.30||£5.55|
|16-17 year olds||£3.87||£4.00|
*This apprentice rate is for apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the National Minimum Wage for their age. Employees aged 25 and over are entitled to the National Living Wage which is currently £7.20 per hour.
Getting the rate of pay right
A four-step checklist for employers following the announcement:
- Know the correct rate of pay (including the National Living Wage)
- Find out which staff are eligible for which rates
- Update the company payroll in time for 1 October 2016
- Communicate the changes to staff as soon as possible
National Minimum Wage increase – The impact on business
The increase in National Minimum Wage along with pension auto-enrolment and the introduction of the National Living Wage is another financial burden that businesses have to deal with.
More information is available on HM Revenue & Customs website. If you would like to discuss how to deal with the additional costs for your business or outsourcing your payroll please get in touch.
If SeavorChartered manage your payroll for you, we will already be reviewing the impact of these changes on your business.