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Changes to the National Living Wage and Minimum Wage

If you are an employer, you will be familiar with both the National Living Wage and the National Minimum Wage.  The National Living Wage is the minimum you can pay a worker aged 25 or over (except those in the first year of an apprenticeship). This is currently set at £8.21 per hour, but from 1 April 2020 it will increase to £8.72 per hour for workers aged 25 or over.

The National Minimum Wage is the least you can pay a worker or an apprentice. From 1 April, it will increase across all bands.

You can find details of all of these bands and changes here.

What does this mean for me as an employer?

As an employer, it is vital to make sure you abide by these changes. If you don’t, HMRC has the power to fine you and any arrears will have to be paid back immediately.  You also have to keep records for three years, proving you are paying at least the National Living Wage or National Minimum Wage.

However, when calculating these wages for your employees, there are rules about what should be included in the calculations. For example, you can’t include items a worker has bought for the job and which they aren’t refunded for – such as tools, uniform and safety equipment.

On the other hand, you must include items such as repayment of overpaid wages, wage advances or loans, Income Tax and National Insurance contributions and penalty charges for a worker’s misconduct.

If you miscalculate and accidentally pay employees less than they are entitled to, you still run the risk of a major fine and having to pay back arrears.

Speak with a THP Payroll adviser today

So, rather than risk making a mistake, why not talk to us today? Our payroll team are happy to advise you and to help make sure you stay on the right side of the law.  Simply get in touch at any of the THP offices, located in Wanstead, Cheam, Chelmsford, Saffron Walden, or in The City and a member of our friendly accounting team can advise you accordingly.

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Avatar for Samantha Rowe
About Samantha Rowe

Sam’s title is Operations Manager, but the title itself doesn’t truly convey the variety of what she does for THP.  From administrative tasks to payroll, strategic business planning, and office systems and procedures, Sam’s primary skill lies in multitasking.

Sam’s journey began as an office junior with George Nottage (now merged with THP), and she soon learned skills in payroll and bookkeeping, and then gained experience as a PA to the Directors, and as Administration Manager.

At the moment, Auto Enrolment is an area that has a key focus for Sam, and for THP as a whole.  “The question I’m asked the most by clients just now is, ‘How will auto enrolment affect me?’ And the answer is, no matter how big or small you are, you will absolutely be affected by the Auto Enrolment regulations. I’d encourage you to start thinking about it now, and to look at your payroll software to make sure you’re ready.”

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