Take note of the National Minimum Wage Increases effective from 1 April 2024 as this may have a big impact on your budgeting in the next financial year if your company/charity is paying employees the NMW.
The Government announced that it has accepted the Low Pay Commission’s recommendations on minimum wage rates to apply from 1 April 2024. This is the largest ever increase to the minimum wage in cash terms. The National Living Wage will apply to all workers aged 21 and over for the first time (previously applying only to those aged 23 and over).
The annual increases to the minimum wage and national living wage with effect from 1 April 2024 are as follows:
• Aged between 18 and 20 - £8.60 per hour (increase of £1.11)
• Aged 16, 17 and apprentices - £6.40 per hour (increase of £1.12)
What this means to you – if you have full-time employees working 37 hours per week for 52 weeks of the year, and they are aged 21 or over, you will need to be paying a minimum annual salary of £22,010.56 per annum from 1 April 2024. Get checking your pay rates!
National Insurance Contributions Clarifications
The upcoming changes in National Insurance Contributions (NICs) and the increase in the National Living Wage in 2024 are significant developments that you need to prepare for.
National Insurance Contributions (NICs) Adjustments
From April 2024, significant changes to NICs will come into effect, impacting both the employed and self-employed sectors.
Here's what you need to know:
Class 1 NICs: The main rate for employees will be cut from 12% to 10%, starting from 6 January 2024. This reduction will lower the combined tax rate for employees paying the basic rate of tax from 32% to 30%.
Class 4 NICs: For the self-employed, the main rate is being reduced from 9% to 8% from April 2024.
Class 2 NICs: This will be abolished for the self-employed from 6 April 2024, but those with profits above £12,570 will continue to receive access to contributory benefits, including the State Pension.
As a business owner, keeping abreast of these changes in National Minimum Wage and National Insurance Contributions is crucial for maintaining compliance and financial stability. These changes will require you to revisit and possibly revise your financial and HR strategies.
Don't wait until the last minute. Get ahead of these changes and ensure your business is prepared. Contact us today for a consultation and learn how we can help you navigate these upcoming adjustments with ease and confidence.
Remember, being proactive now can save you time, money, and legal headaches in the future. Let us help you turn these challenges into opportunities for growth and success.