Minimum wage is the minimum amount of pay that an employer is legally required to provide to an employee for their work. The National Minimum Wage in the UK is set by the government and varies based on age and apprenticeship status.
There's a host of reasons to increase the minimum wage. The main reason is to assist workers in keeping up with the cost of goods, as per inflation, to help people essentially make ends meet. Increases, in line with inflation, are designed to help fight against poverty and help foster more economic security.
The minimum wage for UK workers in 2023 increased by approximately 9.7%, 10.8%, 9.6% and 9.7% depending on age. This is based primarily on advice from the Low Pay Commission (LPC), and is designed to help workers and families continuing to fight continued issues caused by cost of living crisis.
Both the National Living Wage and National Minimum Wage apply to all workers in the UK. It mainly varies based on age (and apprenticeship status). But, even part-time labourers, casual workers and anyone else providing work in the UK are entitled to the minimum wage.
The National Minimum Wage in the UK does not apply to those who are self-employed, working on a volunteer basis and family members who share a common residence as their employer and complete household chores.
The UK minimum wage in 2023 will see increases. Beginning on 1st April, 2023, the National Living Wage will stand at an hourly rate of £10.42, the rate for 21-22 year olds will be £10.18, for 18-20 year olds £7.49 and for 16-17 year olds it will be £5.28.
We undertstand that these changes will affect businesses, especially in a time when many are already struggling. But, as long as businesses can afford to pay it, a compulsory minimum hourly wage should be a good thing for businesses and tehe economy. In business, it can be all too easy to lose sight of the bigger picture, when margins are being cut and targets are being raised but we can never underestimate the importance of employee satisfaction. The government are trying to encourage spending and support families with the soaring cost of bills as well as encouraging saving. All business and employers play a really important part in making this happen.
The national living wage sets out the minimum pay per hour workers are entitled to and must be enforced by employers.
Xero accounting software allows you to add Payroll functionality. Xero payroll software is HMRC-recognised, so you can simplify compliance with HMRC reporting requirements. Pay employees in just a few clicks. Payroll data even updates your accounts automatically. Get in touch to find out how Xero can help with your Payroll compliance.
Give yourself plenty of time to get your head around the National Minimum Wage changes; speak to us if you need to, and ensure you're compliant.
Thanks for stopping by,