Important changes to the UK National Minimum Wage

As of April 1st, the national minimum wage has increased impacting businesses and millions of UK workers. As always the amount per hour the individual will get varies depending on age. Here are some of the important factors employees need to keep in mind when considering the changes.

National Minimum Wage From 01 April

23 years old and over - £8.91
21-22 years old - £8.36
18-20 years old - £6.56
16-17 years old - £4.62
Apprentice rate - £4.30

Directors Salary From 01 April

If you are a Director and an employee of your own business, please consider the following:

A salary of £8,840 per year (£736.66 a month) would not incur PAYE or national insurance.
A salary of £9,568 per year (£797.33 per month) would not incur PAYE or employee’s national insurance. But it would generate an employer’s national insurance bill of £100.46 for the whole year.
A salary of £12,570 per year (£1,047.50 a month) would not incur PAYE. But it would result in the employee’s national insurance of £368.40 being deducted and it would generate an employer’s national insurance bill of £521.92 for the whole year.

In these scenarios, the employer’s national insurance may be covered by the employer’s allowance if you have more than one member of staff.

This is based on an employee with a standard tax code. Don’t forget the salary and the employer’s national insurance, both save corporation tax at 19%!

Gemma Martin, Director

Based in West Bridgford, Nottingham we are accountants who work with individuals and businesses, both locally and throughout the UK. To find out how we could support you, get in touch.