How the increased minimum wage will affect your business costs

How the increased minimum wage will affect your business costs

An increase in the National Living Wage and Minimum Wage starts 1 April 2024


The Government has announced updates to the National Living Wage and National Minimum Wage to take effect from April 2024.


Yes, there is a difference between National Living Wage and National Minimum Wage. The National Minimum Wage is the minimum pay per hour almost all workers are entitled to. The National Living Wage is higher than the National Minimum Wage - workers get it if they’re over 23.


It does not matter how small an employer is; they still have to pay the correct minimum wage.


The rise in the National Living Wage and the National Minimum Wage recommended by the Low Pay Commission was accepted by the Government in November 2023. This increase means that the National Living Wage rises by 9.8% to £11.44 from 1 April 2024.


The size of your overall wage increase will depend on the age of your employees and whether they’re currently working as part of an apprenticeship scheme.


However, the increase in your payroll costs is definitely something to factor into your financial planning for the year.


The new National Living Wage and National Minimum Wage hourly rates from 1 April 2024 are:


  • A £1.02 (or 9.8%) increase to the NLW for those aged 21 and over - from £10.42 to £11.44 per hour


  • A £1.11 (or 14.8%) increase to the National Minimum Wage (NMW) for those aged 18-20 - from £7.49 to £8.60 per hour


  • A £1.12 (or 21.2%) increase to the NMW for those aged 16-17 and


  • A £1.12 (or 21.2%) increase in NMW for apprentices from £5.28 to £6.40 per hour


How will your business cope with the increased costs?


Talk to us about managing your business costs.


Keeping on top of rising business costs in 2024 will be a challenge. But with the right mindset, planning and forecasting, you can stay one step ahead of the curve.


Talk to us about helping you prepare a financial forecast for the next year or two to help you take control in the current economic headwinds.


Get in touch to talk about your financial future.