National Living Wage: Updates April 2022

National Living Wage: Updates April 2022


As a UK Citizen and employer, you must understand the difference between the National Living Wage (NLW) and the National Minimum Wage (NMW), particularly if you're a small business, to ensure that you're paying your staff fairly. After all, if you don't pay your employees correctly, you could face steep fines.

What is the National Minimum Wage?

According to the Gov.UK website, the National minimum wage is calculated according to your age and whether you are an apprentice. To be eligible for the National Minimum Wage, you must be 16 years old or older as of 1st September of this year.

The National Minimum Wage (NMW) is the minimum wage that almost all employees can get from their employer. The National Living Wage (NLW) is higher than the National Minimum Wage (NMW) - employees aged 23 and older qualify for it.

It does not matter how minor an employer is; they must still pay the correct minimum wage. Currently, for those aged 21 to 22, the National Minimum Wage is £8.36 per hour; for 18 to 20-year-olds, it is £6.56; and for persons under 18, it is £4.62 an hour.

According to reports, the national minimum wage will be £10 by the next general election in 2024.

Calculate the Minimum Wage

Use the applicable minimum wage calculators to verify if the correct minimum wage has been paid or if you are in the correct pay bracket. There are calculators for both employees and employers and a history of past paychecks to see if your employer owes you money.

You will also find a guide on calculating the lowest hourly pay for various sorts of occupations.

What is the National Living Wage?

The National Living Wage is a legal minimum wage that went into effect on 1st April 2016 for individuals in the United Kingdom aged 23 and older. It was raised to a far greater degree than the previous nationwide minimum wage level.

What's happening in the current scenario?

During the Autumn Budget and Spending Review in October 2021, Chancellor Rishi Sunak presented the Government's spending plan for the next three years.

In his Budget, he mentioned pay increases for the NMW (National Minimum Wage) and NLW (National Living Wage). Starting in April 2022, he increased both of these minimum wages. The National Living Wage (NLW) will rise from £8.91 to £9.50, and the Minimum Wage will also increase across all age groups. Apprenticeship compensation will go up from £4.30 to £4.81.

Employers should update their payroll to take the NMW/NLW adjustments from 1st April 2022 into account. Employees should be informed of the raise in writing as well.

Apprentices

You may be entitled to the apprenticeship rate if:

National Minimum Wage (NMW) and National Living Wage (NLW) Rates

The current and updated rates for the National Living Wage (aged 23 and over) and the National Minimum Wage (at least school leaving age) are mentioned below. The rates change on 1st April every year.

The NLW and NMW rates from 1 April 2022 are:

Rate from April 2022Current rate (April 2021 to March 2022)Increase
National Living Wage£9.50£8.916.6%
21-22 Year Old Rate£9.18£8.369.8%
18-20 Year Old Rate£6.83 £6.564.1%
16-17 Year Old Rate£4.81£4.624.1%
Apprentice Rate£4.81£4.3011.9%

In case of failure to pay the National Minimum Wage (NMW), the Penalty may result in a fine of up to £20,000. Make sure you know when your staff's birthdays are and that your records are up-to-date.

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