As they do every year, the National Minimum Wage (NMW) rates will increase on 1st October 2016. If you run a business and employ staff, you need to be aware of the changes and introduce them in your first payroll period following the introduction.
The Government regularly name and shame employers paying less than the minimum wage. Worse still that the potential bad press for your business is the penalty for non-compliance – up to £20,000 per worker.
National Minimum Wage Rates from October 2016
From next month the new rates of NMW will be:
- 21-24 year-olds – £6.95/hr (up from £6.70/hr)
- 18-20 year-olds – £5.55/hr (up from £5.30/hr)
- 16-17 year-olds – £4.00/hr (up from £3.87/hr)
- Apprentices – £3.40/hr (up from £3.30/hr)
The recently introduced National Living Wage for workers aged 25 and over, remains at £7.20 per hour. The Low Pay Commission will be making a recommendation to Government in the Autumn on the rate which should apply from April 2017.
As well an increase in employees net pay, you’ll see an increase in your monthly PAYE bill. The overall cost increase to employ a full time worker aged between 21-24, will go up by around £590 extra per employee per year (£520 in gross wages and another £70 on Employers National Insurance Contributions).