The start of the new tax year is nearly upon us. Between 1st April and 6th May, there will be a number of changes (and freezes) to statutory pay rates. As an employer, you need to not only know the rate increases, but also be ready to apply them.

In this post, we’re providing a summary of the main statutory pay rates for 2024 to 2025. These range from Statutory Maternity Pay to the redundancy rate cap and Statutory Sick Pay. We’ve also included a reminder about the National Living Wage (NLW) and National Minimum Wage (NMW) rates for the upcoming year. In addition, we’ve provided more information about which employees are entitled to the NLW and NMW here.

Statutory Sick Pay

Statutory Sick Pay will increase from £109.40 to £116.75 from 6th April.

Maternity, paternity and related rates

There is a single rate for Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay and Statutory Parental Bereavement Pay.

This will increase from 7th April 2024. The rate will then become £184.03 per week or 90% of average earnings, whichever is the lower.

Redundancy pay cap

The redundancy pay cap will change from 6th April. If you make employees redundant and they have two years’ service or more, you must give them redundancy pay based on their weekly pay, length of service and age. For this calculation, weekly pay was capped at £643.  The amount that this will rise to for 2024/25 is expected to be announced in March.  The maximum statutory redundancy pay you can get in 2024/25 will be available at the same time.

Lower earnings limit for National Insurance

The lower earnings limit is £242 pw in line with the tax free allowance. This is the amount a person can earn per week before having to pay Class 1 National Insurance contributions.

Minimum & Living Wage, apprentices and accommodation offset

These new rates are best understood by consulting this table, which compares the April 2024 rate with the previous April 2023 rate. For those aged 23 and over the figure is for the National Living Wage. The National Minimum Wage is for younger employees who are over school leaving age.

 

23 yrs + 21-22 yrs 18-20 yrs Under 18 yrs Apprentice
April 2023 £10.42 £10.18 £7.49 £5.28 £5.28
April 2024 £11.44 £11.44 £8.60 £6.40 £6.40

 

A note about apprentices. They are entitled to the apprentice rate if they are aged under 19, or they’re aged over 19 and in the first year of their apprenticeship. If they are aged over 19 and have completed their first year, they should be paid the minimum rate for their age.

The ‘accommodation offset’ rates will also change in April 2024. If you provide accommodation for your employees, you can offset a certain amount against the National Minimum Wage or National Living Wage. The current and upcoming rates are below. The new rate also comes into force on 1st April.

 

Daily offset rate Weekly offset rate
April 2023 £9.10 £63.70
April 2024 £9.99 £69.93
 

Advice on statutory pay rates 2024

If you need help applying the new rates, you may wish to consider our payroll outsourcing service. We can ensure that you pay the correct rates, remain compliant with the law and avoid penalties. To learn more, please get in touch or – if you are already a THP customer – talk to your account manager.

Need further advice on any of the topics being discussed? Get in touch and see how we can help.

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    About Jon Pryse-Jones

    Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.

    An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”

    Jon’s appreciation for THP extends to his fellow team members and the board.  “They really know how to run a successful business,” he says.  He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.

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