Not quite sure on the difference between the national living wage and the national minimum wage?
In a nutshell, in legal payroll terms, the National Living Wage is the National Minimum Wage for employees 25 and over years of age.
If you have got anyone UNDER 25 who is paid around the minimum wage, just check the rates if you haven’t already, as some of them have gone up from 1 October 2016, and come into effect from the first payments after that date.
Here are the current rates next to the previous rates so that you can see the difference:
||25 and over
||21 to 24
||18 to 20
They haven’t gone up by much, but it does all tot up for an employer. For a 23 year old on a 40 hour week, it works out to around an extra £520 a year (we have just worked on 52 weeks there to save you getting out your calculators.
The National Minimum Wage changes each October. The rate for 25 and overs became known as the National Living Wage this April. You will have spotted that the over 25 rate has stayed the same in the table above. It is due to be reviewed each April, so look out for further changes in April next year too.
You may have heard talk of the National Living Wage going to rise to £9 by 2020. This is not written in stone (or statute) as yet, but the rates are planned to rise each year. There has been much debate as to whether leaving the EU might impact on the amount, but that remains to be seen!
The National Living Wage is the term used by government for the statutory minimum rates of payment. If you look it up, you will find various bodies suggesting that a living wage calculated on the cost of living, is a higher figure eg http://scottishlivingwage.org/accredited (We are sure you will have your own opinions. You will notice that we are remaining scrupulously neutral on this matter!)
If you have concerns that any wage increases will impact on your costs, get in contact so that we can look at your figures with you.
Wishing you a week above the minimum.