All employers need to be ready for new pay rates coming into force on 1 October 2016, with all rates increasing by much more than inflation, which has averaged only 0.4% over the course of 2016.
While most employers pay workers at or above national minimum wage rates, to make sure you 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.
| Category | From April 2016 | From October 2016 – April 2017 | % Increase |
| Adult rate (21+) | NLW (25+) £7.20 | £7.20 | n/a |
| Adult Rate (21-24) | £6.70 | £6.95 | 3.7% |
| YDR (18-20) | £5.30 | £5.55 | 4.7% |
| 16-17 Yr Old Rate | £3.87 | £4.00 | 3.4% |
| Apprentice Rate | £3.30 | £3.40 | 3% |
See more information on the national minimum wage. For any help with payroll issues, please contact sarah@in-accountancy.co.uk on 0161 456 9666.
