2024 National Minimum and National Living Wage Rates Announced
Alan Kitto
This evening the Government has published the new National Minimum Wage and National Living Wage Rates which will be effective from the start of April 2024. For the second year running there has been a significant increase, higher than pundits were forecasting.
It’s important to note that the new National Living Wage rate applies to everyone aged 21 and over and not 23 and over as was the case for this year’s increase, this is in line with the Government’s pledge to have the upper band apply to 21 years olds by the end of this parliament.
The new rates are:
For 16 - 17 year olds - £6.40 per hour (up from £5.28)
For 18 - 20 year olds - £8.60 per hour (up from £7.49)
For 21 year olds and above - £11.44 per hour (up from £10.42)
For employers who pay weekly, or based on actual hours worked each week, based on a 40 hour week, this would mean annual earnings for each age group will be:
£13,363.20 for 16 - 17 year olds
£17,956.80 for 18 - 20 year olds
£23,886.72 for those 21 years old and above
However, the regulations that surround National Minimum and National Living Wage requrie the prevailing rate to be paid in each month, for the hours worked that month; some months have 20 working days and others 23 and hence to be fully compliant, you’ll need to base the annual salary on a 23 day month’s hours.
This would make the prevailing annual salaries:
£14,131.20 for 16 - 17 year olds
£18,988.80 for 18 - 20 year olds
£25,260.00 for those 21 years old and above
The alternative would be to pay employees a different salary each month based on the number of days each month, which will add extra work for your payroll department and likely confuse some employees.
For more information on these changes, please give us a call.