Minimum Wage increases from April 2021

Category: Amber AccountingPayroll - Posted On: Feb 24 2021


The government has announced increased minimum wage rates that will take effect from 1 April 2021.

The National Living Wage (NLW) will increase by 2.2% from £8.72 to £8.91 and will be extended to 23 and 24 year olds for the first time. For workers aged under 23, Commissioners recommended smaller increases in recognition of the risks to youth employment, which the current economic situation poses.

NLW and National Minimum Wage (NMW) rates will increase as follows:

 Rate from April 2020Rate from April 2021Increase
National Living Wage£8.72£8.912.2%
21-22 Year Old Rate£8.20*£8.362.0%
18-20 Year Old Rate£6.45£6.561.7%
16-17 Year Old Rate£4.55 £4.621.5%
Apprentice Rate£4.15£4.303.6%
*Rate also applies to those aged 23 and 24

You can now calculate if the correct minimum wage has been applied by using the GOV calculators for workers and for employers.

What are the penalties for non-compliance?

It is important to adhere to the new rates as the penalties imposed on employers that are in breach of the minimum wage legislation are 200% of arrears owed to workers, with the maximum penalty of £20,000 per worker. However, the penalty is reduced by 50% if the unpaid wages and the penalty are both paid within 14 days. HMRC will also name and shame employers who are penalised which could amount to untold reputational damages.

We have a dedicated payroll team that support our clients with the everyday issues associated with employing staff. You can outsource your payroll function to our knowledgeable experts, allowing you to focus on the day-to-day running of your business. You can read more about our payroll team and how we can help here.

For more information or support with any payroll query, or to discuss outsourcing your payroll function, please contact our Amber Accounting team today on info@amberaccounting.co.uk or call 01382 312140.