Carter Jonas
Carter Jonas

National Minimum Wage from October 1

The National Minimum Wage rates rose on October 1.

The new figures are:
• a 20p increase in the adult rate (from £6.50 to £6.70 per hour)
• a 17p increase in the rate for 18 to 20 year olds (from £5.13 to £5.30 per hour)
• an 8p (2%) increase in the rate for 16 to 17 year olds (from £3.79 to £3.87 per hour)
• a 57p increase in the rate for apprentices* (from £2.73 to £3.30 per hour)

*This rate is for apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the National Minimum Wage for their age.

As an agricultural sector employer you may offer accommodation as part of employment and this can be offset against the statutory minimum wage. There is a useful calculator here.

It’s important to be aware of significant dates such as employee birthdays to ensure people are paid at or above the correct minimum wage for their age. There are also rules about rates for different types of work, such as piece work, and holiday pay entitlements. Further explanation can be found here.

Employers with queries about the national minimum wage system should find the answers here.

There is a national minimum wage calculator here.

You may also have heard about the national living wage, which comes into effect from April, 2016. It introduces a rate of £7.20 an hour for workers aged 25 and older – the national minimum wage will still apply for workers aged 24 and under. 

It is the start of a process announced by the Chancellor, George Osborne, in his Summer 2015 Budget. The intention is that by 2020 the National Living Wage will be more than £9 an hour.

In an effort to minimise the impact on employers, from April 2016, the National Insurance contributions (NICs) Employment Allowance will rise from £2,000 to £3,000 a year. When introduced in 2014, the Employment Allowance offset the NICs costs of employing four workers full time on the NMW. The increase in the Employment Allowance means four workers can be employed full time on the new NLW next year without paying any NICs.