Keltic Accounting

National Living Wage & Minimum Wage Rates

On 1 April 2020, the new National Living Wage (for employees aged 25 and over) and Minimum Wage (for employees aged 24 and under) rates will come into effect.

 

Age

Minimum Hourly Rate
April 2019 April 2020
25 and over £8.21 £8.72
21 to 24 £7.70 £8.20
18 to 20 £6.15 £6.45
Under 18 £4.35 £4.55
Apprentice rate (for apprentices under 19, or 19 or over but in 1st year of apprenticeship) £3.90 £4.15

The National Living Wage and the National Minimum Wage rates increase every April and apply to employees who are:

  • At least school leaving age (16 years of age in Scotland); and
  • Aged 25 or above to get the National Living Wage.

Apprentices are treated slightly differently. The Apprenticeship rate applies to apprentices who are:

  • Aged under 19; or
  • Aged 19 or over and in the first year of their apprenticeship.

So, for example from April of this year, if an apprentice is aged 24 and in the first year of their apprenticeship, they are only entitled to a minimum hourly rate of £4.15. However, once they’ve completed the first year of their apprenticeship then their rate would increase to the minimum wage for 21 to 24 year olds of £8.20.

Employers have a legal duty to ensure that their employees are being paid at least the minimum wage. HM Revenue and Customs (HMRC) officers have the right to carry out reviews at any time and ask to see payment records. They can also levy fines for non-compliance.

It’s therefore important to not only check that you’re using the correct pay rates every April but to monitor the age of your younger workforce, aged 25 and under, throughout the year to ensure that increases in pay rates are always applied at the appropriate time.

If you’ve any concerns, feel free to contact our Payroll Team who will be delighted to help.