National minimum wage increase in October

The new National minimum wage increase is set to come into force next month.

Stockport based In Accountancy are reminding businesses that, from 1st October, all employers need to be ready for the new national minimum wage pay rates.

All national minimum rates are increasing by much more than inflation, which has averaged only 0.4% over the course of 2016.

National minimum wage increase rates differ for the different age bands and for apprentices will increase at the start of October.

Sarah Harkness, managing director at In Accountancy advised that, while most employers pay workers at or above national minimum wage rates, businesses need to make sure that they don’t fall into the small minority that underpay.

You need to:

• Check the new national minimum wage rates
• Check you know who is eligible in your organisation
• Take the appropriate payroll action.

New pay rates

The following changes will be introduced:

• For 21-24 year olds, pay will increase from £6.70 to £6.95 an hour
• the Youth Development Rate, affecting 18-20 year olds, will increase from £5.30 to £5.55 an hour.
• the 16-17 year old rate will increase by £3.87 will increase to £4.00 an hour.
• the Apprentice Rate of £3.30 will increase to £3.40 an hour.

In addition, the Government is introducing the £7.20 National Living Wage for workers aged 25 and over – in effect a fifth minimum wage rate – from 1 April 2017.