National Living Wage and National Minimum Wage

From 1 April 2021, the National Living Wage increased to £9.50 an hour.

As an employer, you need to be aware that the hourly rates for the National Living Wage and the National Minimum Wage increased from 1 April 2022.

The National Living Wage increased by 6.6%, from £8.91 an hour to £9.50.

At the same time, the rate for the National Minimum Wage has also risen.

Employees underpin every successful business, and it is right that they are treated fairly at work, receive a decent wage and have the opportunity to develop a career.

More than 2 million people across the UK receive the National Living Wage or National Minimum Wage.

Measured increases support Britain’s workforce, while recognising the impact the COVID-19 pandemic has had on business.

They are a key part of the Government’s commitment to levelling up the UK and providing equal opportunities for all, as part of its plan to Build Back Fairer.

 

The National Minimum WageLink opens in a new window is the minimum hourly pay that most workers in the UK are entitled to by law. The Government sets this rate. Find out who is eligible to receive itLink opens in a new window.

It was introduced in 2016 at a rate of £7.20, with an initial target to reach 60% of median UK earnings (that is, the amount that falls exactly in the middle of the range of earnings across the entire UK) by 2020.

Since then, the rate has seen significant increases, and the target has been increased to 66% of median UK earnings by 2024.

The National Minimum Wage varies depending on an employee's age and whether they work as an apprentice.

From 1 April 2021, employers must pay the National Living WageLink opens in a new window to workers who are 23 or older. The National Living Wage is the highest rate of the National Minimum Wage.

Find out more at GOV.UKLink opens in a new window

This is the only UK wage rate based on living costs. It is set by the Living Wage FoundationLink opens in a new window.

Businesses that believe their staff deserve a wage that meets everyday needs – like the weekly shop or a surprise trip to the dentist – can choose to pay it.

Right now, 7,000 businesses in the UK voluntarily pay their employees the Real Living Wage.

A broad range of employers are accredited with the Living Wage Foundation, including two-fifths of the FTSE 100 and household names like Nationwide, Google, Brewdog, Everton Football Club and Chelsea Football Club.

The rate is £9.90 across the UK and £11.05 in London (covering all boroughs in Greater London).

Read more about how the Real Living Wage is calculatedLink opens in a new window

To avoid falling foul of the law, you should take the following simple steps to meet your legal responsibilities regarding the National Living Wage and the National Minimum Wage:

  • identify the relevant new rates for each of your staff (as appropriate)
  • update the company payroll
  • communicate the changes to staff as soon as possible

 

You can read more about the increases to the National Living Wage rate at GOV.UKLink opens in a new window.

You can also call the Acas HelplineLink opens in a new window for advice and support to help you understand what you need to do to pay your employees correctly.

Even if you’re paying your employees at or above the National Living Wage or National Minimum Wage, you could still be underpaying them.

This can easily happen if you make wage deductions or don’t pay employees for all the time they work.

If you find you’ve been paying your employees below the correct minimum wage, you must pay any arrears immediately.

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