From 1 April 2022, the rate of National Living Wage paid to workers aged 23 and over will rise by 6.6%, or 59p, to £9.50 an hour. Apprentices will benefit from an 11.9% uplift to their current hourly rate of National Minimum Wage.
For full-time workers, the 59p increase equates to extra annual salary of at least £1,000. Current and future rates of National Living/Minimum Wage are:
23 and over: £8.91 – £9.50 (6.6% increase)
21 to 22: £8.36 – £9.18 (9.8% increase)
18 to 20: £6.56 – £6.83 (4.1% increase)
16 to 17: £4.62 – £4.81 (4.1% increase)
Apprentices: £4.30 – £4.81 (11.9% increase)
Apprentices receive the apprentice rate if they are either aged under 19 or in the first year of their apprenticeship. For example, a first-year apprentice aged 21 can be paid the apprentice rate.
The provision of accommodation is the only benefit that counts towards national minimum pay, with the maximum offset increasing to £8.70 a day (£60.90 a week).
HMRC has published a checklist of common causes of minimum wage underpayment:
-Making a wage deduction for something job-related, such as the provision of a staff uniform;
-Making a wage deduction where the employer benefits, such as employer-provided transport;
-Not paying for any additional time added on to a worker’s shift;
-Not paying for travelling time; or
-Not paying for any time spent training.
Real Living Wage
National Living/Minimum Wage rates should not be confused with the Real Living Wage. This is independently calculated to reflect the cost of living and can be paid by employers on a voluntary basis; nearly 9,000 employers do so.
The current Real Living Wage rate is £9.50 an hour, with a London rate of £10.85. It is aimed at all workers aged 18 or over.
HMRC’s checklist of common causes of minimum wage underpayment, along with links to detailed guidance, can be found here.