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National Minimum Wage

National Minimum Wage rates and National Living Wage rates effective from 1 April as applicable:

W Ratourly rate – from 1.10.2010 Current rate – from 1.10.2009

Prepared by: VADVA & PICKERING LTD, Chartered Certified Accountants. E&OE. The above is prepared in good faith without any responsibility on our part. Reference to the full legislation should be obtained in uncertain circumstances.

The NMW is the BASIC PAY, including bonuses or commission, but excluding overtime or shift work and excludes deductions for expenses linked to the job such as uniforms, transport or agency fees or benefits in kind such as meals, car or fuel benefits,  pension contributions and medical insurance.  Tips are also excluded.

However, employers can deduct accommodation up to £9.99 per day for 2024/25 (£9.10 2023/24) and the offset will not apply to students on further or higher education courses. Other rules also apply - link accommodation

• With a few exceptions, all workers in the UK aged 16 or over are legally entitled to be  paid a minimum £/hour, regardless of the kind of work they do or the size and type of company. There is no minimum period a person must work in order to qualify.
• The minimum amount is payable even if an employer asks a worker to sign an employment contract at a lower rate of pay
• Not paying the National Minimum Wage that an employee is entitled to can count as an unlawful deduction from wages. Automatic financial penalties apply for non-compliance and employers who flout the law will be named.It is not necessary to be in full-time employment, or to work at an employer’s premises, for example, an entitlement to receive the minimum wage arises if a person is employed by an agency, a homeworker, a part-time worker, a casual worker, a piece worker, a foreign worker, or a worker on a short-term contract.

EXCEPTIONS - NMW does not apply to the following:

• a worker under school leaving age (that is, they turn 16 at the end of summer school term)

• a student on work experience forming part of a UK higher or further education course if the work placement is for <  1 year
• genuinely self-employed
• Directors who are ‘office holders’ in law and do not have an employment contract
• an au pair, a person in the armed services and voluntary workers for charities who receive reasonable expenses/benefits.

Resources

For more information visit     https://www.gov.uk/national-minimum-wage

National Minimum Wage calculator - https://www.gov.uk/am-i-getting-minimum-wage

National Minmum Wage helpline - 0845 6000 678  (P.S. Reference to the full legislation should be made in uncertain circumstances)

From November 2023, the minimum wage levels set by the Living Wage Foundation for all employees aged over 18 will be £12 per hour (2022: £10.90). London rate will be £13.15 per hour) (2022:£11.95). This is voluntarily paid by participating organizations.

The effect of the increase in the National Living Wage from £10.42 to £11.44 is set out in the table opposite for those over aged 21 and over. It shows the equivalent annual salary for an employee being paid the National Living Wage at different weekly hours worked, comparing the new rates from 1.4.2024-31.3.2025 with the rates from 1.4.2023-31.3.2024.