With minimum wage set to rise in April 2017, it is about time you looked at your wages and got them in order, before it is too late.
From April 1st, all workers aged 25 and older will be legally entitled to earn at least £7.20 per hour. If you are not covering this minimum pay rate there could be complications and you will have to pay arrears, if not more, back to your employees in the future should an error have occurred.
National Minimum Wage
The current National Minimum Wage stands at £6.95 for 21 to 24 years old and £5.55 for 18 to 20 year olds. With all UK workers needing to be school leaving age to get minimum wage, there is an under 18 hourly rate of £4.00 and an apprentice wage of £3.40 an hour until they are of official wage age.
Those eligible for minimum wage include:
- Agency workers
- Casual labourers
- Foreign workers
- Offshore workers
- Part-time and full-time
- Homeworkers, trainees, disabled workers
Those not eligible to get minimum wage include:
- Company directors
- Armed forces members
- Higher and further education students on placement positions
- (Many more found here)
National Living Wage
The National Living Wage only applies to those older than age 25 and currently stands at £7.20 per hour. Regardless of how large or small your business is, you have to legally keep in line with the minimum living and national wage requirements which you can check using the gov.uk website.
To find out more about your business and how to pay your employees, call Coleman and Co today and discuss your query.
Annual Rate vs. Paid by The Hour
One of the biggest challenges for many businesses is to pay employees right first time. With credible payroll software and expertise in the financial industry, Coleman and Co are able to guide you and your business plan down the right path and get payments in the right order before the changes in April.
Annual Rates – find your employees annual hours that are stated in their contract, divide this by the number of times they are paid in the year and you will discover the average number of hours they will work over that period. This amount is what will indicate how many hours they work and how much per hour they are actually paid.
Hourly Rates – If your employee does 140 hours a month and gets paid monthly, divide the amount he earned that month by the hours he worked and you are left with the actual hourly rate he achieved.
Changes in April
The changes that are to come next week in April will see the minimum living wage increase to £7.50. The national minimum wage for 21-24 also rises to £7.05, 18 to 20-year-old raises to £5.60 and the under 18 wage rises to £4.05.
With a steady increase across the board of £0.05, apart from the living wage, making alterations to your accounts are not too hard to process for those in the know.
It is classed as criminal offence if you do not pay your workers the national living and minimum wage. If you were to fake payment records, not have them in order or fail to pay the correct amounts, you can be found to be breaking the law, something all businesses want to avoid.
Get in Touch Today
To discover if your accounts are in order and to find an accountant you can trust, call Coleman and Co today on 028 9266 3599. HMRC carry out payment checks on businesses all the time, don’t get caught out and get your payroll right today.