- November 23, 2023
- Written by Liz Marker
- Category: Blog
National Living Wage increase set for April 2024
On Wednesday 22 November 2023 the Government shared their Autumn Budget, an annual statement which is made by the Chancellor of the Exchequer to the House of Commons setting out the Governments planned spending and revenue gathering measures.
As part of the 110 measures announced yesterday was the largest ever cash increase to the minimum wage, otherwise known as the Living Wage. Liz Marker, Payroll Manager at Westcotts explains what this could mean for you and your business.
The changes to the National Living Wage
The National Living Wage (NLW) will increase to £11.44 from April 2024, an increase of £1.02. The living wage will also include employees from 21, currently the NLW age bracket started from 23-year-old.
Below is a table of the new rates from April 2024 which also includes the current rates as a comparison. As you can see the largest percentage increases are for the 16 to 17 and apprentice rate, with an increase of 21.2%.
| Rate From 1 April 2024 |
Current Rate (April 2023 to March 2024) |
Increase
£ |
Increase
% |
|
| National Living Wage (21 years old and over ) | £11.44 | £10.42 | £1.02 | 9.8% |
| 21-22 years old – No longer applicable – see above | £11.44 | £10.18 | £1.26 | 12.4% |
| 18-20 years old | £8.60 | £7.49 | £1.11 | 14.8% |
| 16-17 years old | £6.40 | £5.28 | £1.12 | 21.2% |
| Apprentice Rate | £6.40 | £5.28 | £1.12 | 21.2% |
| Accommodation Offset | £9.99 | £9.10 | £0.89 | 9.8% |
*Apprentice rate applies for under 19 years old, when 19 and above and employed for longer than 12 months must revert to normal minimum wage rate.
Why is this important?
This is good news for employees, but how does this impact you and your business?
Ultimately your business is going to have to deliver these increased wages from April 2024. This means you will need to factor these increases into your business decisions going forward.
If you already pay your employees above the NMW, you will need to be careful that any offer of salary sacrifice doesn’t drop the hourly rate below the new NMW rates. This means it’s important to be aware of how deductions from an employee take home pay must be carried out, this could include deductions for training, DBS checks, or clothing. All these could reduce the employees’ hourly rate to below the NLW hourly rates.
Westcotts are here to help navigate these issues to ensure you stay compliant. If you need some advice on payroll, get in touch with Liz via email at liz.marker@westcotts.uk or call 01752 666601.
