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Minimum wage increases from 1st April

3rd Apr 2023
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Calling all payroll processors, did you know that the National Minimum Wage (NMW) and National Living Wage (NLW) rates change on 1st April every year? This year we are seeing NMW and NLW rates increase by between 9.7% and 10.9%.  

What is the NMW?  

In the UK, the NMW is the minimum hourly rate an employer legally has to pay to their employees. The rate an employee is entitled to will depend on their age and whether or not they are doing an apprenticeship. The NMW applies to workers aged between 16-22 and those of any age who are in their first year of an apprenticeship.    

What is the NLW?  

The NLW is the minimum hourly rate of payment for workers aged 23 and over and who are not in their first year of an apprenticeship. As of the 1st of April 2023, the National Living Wage rate will increase by 9.7% to £10.42 per hour. 

National Minimum Wage rates  

The figures below are effective from the 1st of April 2023 

  Rates from April 2023

Previous Rates

(April 2022-March 2023)

Increase

National Living Wage

(Aged 23 +)

£10.42

£9.50

9.7%

21 - 22 year old £10.18 £9.18 10.9%
18 - 20 year old £7.49 £6.83 9.7%
16 - 17 year old £5.28 £4.81  9.7%
Apprentice £5.28  £4.81 9.7%
Accomodation offset £9.10 £8.70  4.6%

London Living Wage 

The London Living Wage is a minimum hourly rate of pay that was calculated to reflect the high cost of living in the capital. Employers in London are not legally required to pay their employees this rate, they must choose to do so. Currently, there are over 2,500 employers in London who pay their employees the London Living Wage. 

Why did wage rates increase this year?  

NMW and NLW rates increased this year by a much higher rate than previous years. The government decided to increase minimum wage rates to help keep up with inflation and to help ease the cost-of-living crisis. The increase to the NLW is worth over £1,600 a year before tax to full-time workers. 

Who is not entitled to the NLW or NMW?  

Although the NMW and NLW rates apply to all workers, it doesn’t apply to workers that are self-employed or volunteers. 

What about apprentices?  

The apprentice rate applies to anyone under the age of 19 or over the age of 19 and in the first year of an apprenticeship. Those over the age of 19 and in their second year or above are entitled to the relevant minimum wage for their age.  

What do payroll processors need to do? 

As the NLW and NMW rates increased on the 1st of April, you must ensure that your payroll software has been updated to reflect these new rates.  

If you want to find out more about Bright’s payroll software, BrightPay, why not book a free 15-minute demo to see just how easy it can be to process payroll.  

 

Ross Graham

 

Written by Ross Graham | Bright 

BrightPay by Bright

 

 

 

 

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