National Minimum Wage and National Living Wage
There will be a new National Minimum Wage for workers aged 24 and under. The new National Minimum Wage (NMW) is the minimum pay most workers are entitled to by law and will apply for pay reference periods starting on or after 1st October 2016.
The pay reference period is usually the period of time for which a worker will be paid. So, for example, for weekly paid employees working a week in arrears, the first pay period that needs to be paid at the NMW will be for the week 3rd to 9th October, payable on 14th October 2016.
The National Living Wage set on 1st April 2016 for employees aged 25 and over will remain unchanged at £7.20 per hour.
With HMRC’s policy regarding offenders it’s worth bearing in mind that the penalties for non-compliance are high, so please review all your workers age and increase their pay accordingly.
Rates of Pay
The rates from the 1st October 2016 are:
- £6.95 for 21 – 24 year olds
- £5.55 for 18 – 20 year olds
- £4.00 for 16 – 17 year olds
- £3.40 for apprentices under 19 or 19 or over who are in their first year of apprenticeship