The annual increase in the National Minimum Wage (NMW) rates are linked to the rate of inflation, which for the past few months has been hovering around 10%.
Hence the NMW rates that must be paid for pay periods starting on and after
1 April 2023 have all risen by around 10%.
Hourly Rate
Age 1 April 2023
23 and above £10.42
21 to 22 £10.18
18 to 20 £7.49
Under 18 £5.28
Apprentice £5.28
The rate for those aged 23 and above is known as the National Living Wage. In addition, the daily accommodation offset will rise from £8.70 to £9.10. This is the maximum amount the employer is permitted to ignore as a deduction made to charge the worker for living accommodation provided. If the employer deducts more than this amount from the worker’s wages, the excess is treated as reducing the amount of earnings for NMW rate purposes. No other deductions from wages are permitted to be ignored for NMW rates.
Employers often deduct small sums for uniform, food, childcare vouchers or even for places at the child nurseries where the employee works. All of these sums must be taken into account when calculating the net wage (before tax) which HMRC checks against the relevant NMW rate.
Please talk to us before setting up any form of salary substitution so that we can check that the NMW rules are not being broken.