• Rebecca Shrimpton

National Minimum Wage Changes 2020.

As tax year end approaches it is time for the yearly National Minimum Wage rate changes. These are rates that are reviewed on an annual basis by the government & employers must pay their employees at least these rates. Get your business ready for these changes which take effect from 01st April 2020.

For workers over the age of 25, there will be a 6.2% increase – rising from £8.21 to £8.72 per hour signalling the largest individual increase of the last 8 years. Across a full-time working year, an over-25 employee will see a pay rise of £930.

The increased rate of pay for 21 to 24-year olds has also risen, this time by 6.5% as the hourly amount will go from £7.70 to £8.20 per hour – meaning an extra £910 annually.

The lower rates of pay will be set as follows:

18 to 20-year olds will see their hourly rate increase from £6.15 to £6.45 per hour

Under 18-year olds (non-apprentice) will increase from £4.35 to £4.55 per hour

The apprentice wage – for those who apply under the criteria of being under the age of 19, or being aged 19 and over, but who are still in the first year of their apprenticeship will rise from £3.90 to £4.15 per hour.

The Difference between the National Minimum Wage (NMW) & National Living Wage (NLW)

The National Minimum Wage applies to anyone aged over the school leaving age up to 24 years old. Employee’s aged 25 and over must be paid the National Living Wage rate, which is the top tier mandatory rate of £8.72 per hour from April 01st 2020.

Prior to 2016, the National Minimum Wage applied to all age groups, however, changes in the National Minimum Wage Regulations 2015 re-branded the National Minimum Wage for workers aged 25 and over to the National Living Wage (NLW). The NLW rate for 2019/2020 is £8.72 per hour so from April 01st 2020, all employees aged 25 and over will see a pay increase £0.51 per hour to their usual pay rate.

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