Increase in the National Living Wage and National Minimum Wage from 1 April 2019
The National Living Wage and National Minimum Wage rates will increase from 1 April 2019:
National Living Wage (NLW):
- employees aged 25 or over who are not in their first year of an apprenticeship will be legally entitled to £8.21 per hour.
National Minimum Wage (NMW):
- employees aged 21 to 24 - the rate increases to £7.70 per hour
- employees aged 18 to 20 - the rate increases to £6.15 per hour
- employees aged under 18 - the rate increases to £4.35 per hour
- for employees completing a nationally recognised apprenticeship qualification under the age of 19, or older but in the first year of the apprenticeship
period – the rate increases to £3.90 per hour.
This means, for example, a full-time worker aged 25 and over, working 40 hours per week on the National Living Wage will therefore receive an annual pay increase of £790.40.
If an employer provides accommodation for an employee, the employer can use the government specified amount (the daily accommodation offset rate) towards their rate of pay. This is the only benefit in kind that can be used for this purpose.
The daily accommodation offset rate will rise to £7.55 or £52.85 per week from 1 April 2019.
Employers should be aware that failure to pay the prescribed rates can lead to substantial fines and prosecution. In addition, if HMRC discovers that an employer has not paid the correct rate of pay, then they will have to pay the shortfall to their employees.
If you would like any additional information regarding the increase in the National Living Wage and National Minimum Wage please don't hesitate to contact our Payroll Partner, Graeme Sheridan, on the details below:
direct dial: 01942 292506
mobile: 07712 679064