Employers! Upcoming changes to minimum wage rates
National Minimum Wage
Following the Low Pay Commission’s recommendations from 2020, the Government are still looking to meet their target and ensure the national minimum wage reaches two thirds of the median earnings by 2024. As a result, we will see the national living wage increase 6.6% for individuals aged 23 and over. This will be an increase from £8.91 to £9.50 made effective from 1st April 2022.
Additionally, from the same date we will also see the rate for 21 and 22 year olds rise from £8.36 to £9.18 (9.9%), the rate for 18 to 20 year olds rise from £6.56 to £6.83 (4.1%), the rate for 16 and 17 year olds rise from £4.62 to £4.81 (4.1%), and the rate for apprentices to rise from £4.30 to £4.81 (11.9%).
The report points out that this increase in wage will likely be more beneficial towards women since more women than men are on the national living wage and national minimum wage.
The Government are seeking to support the reallocation of labour shortages by extending the incentive payment deadline until 31st January 2022. This means if you have an apprentice start between 1st October 2021 to 31st January 2022 you can apply for a payment of £3,000 from 11th January 2022 to 15th May 2022. You can spend this £3,000 on anything to support your organisation’s costs in hiring the apprentice and there is no obligation to pay it back. To be eligible for the full payment your apprentice must work a full year with the first instalment being paid on the first 90 days of their apprenticeship.
To find out more about this benefit and how you can apply, click here.
The Health and Social Care Levy
Following an announcement made on 7th September 2021, the Government plans to financially support UK health and social care bodies by legislating a new Levy. This new Health and Social Care Levy will increase tax on earnings for employers, employees and the self-employed by 1.25%. This new Levy will come into force 6th April 2023.
However, until then, the Levy will be taking from increasing NICs for working age employees, self-employed people and employers by 1.25%. It will apply to those who pay Class 1, Class 1A, Class 1B and Class 4 National Insurance contributions and will begin from 6th April 2022.
Please note that the information contained in this article was correct at the time of writing. There may have been updates to the law since the article was written which may affect the information and advice given therein.