The National Minimum Wage is the minimum amount (£) a company can pay an employee in the UK. The UK government regularly monitors this amount and changes the figure annually in accordance with inflation. The minimum wage increase in the UK was last implemented on April 1 2023.
In this article, we will look at everything about the National Living Wage 2023, National Minimum Wage 2023, National Living Wage 2024 and National Minimum Wage 2024, their differences being one of them.
More About UK National Minimum Wage
The UK National Minimum Wage is a law that requires all employed people to earn enough to meet the basic cost of living. Thus, every employer should know how much to pay each employee in order to remain compliant.
Rates vary widely according to the employee’ age because it is presumed that costs of living increase with age and there are more financial burdens. Learners who are learning while working receive the National Minimum Wage but at a lower rate.
At the beginning of each financial year, rates change to make them fit for purpose as the economy grows or shrinks.
The employer must determine the minimum wage for employees and pay at least the minimum amount for all eligible hours worked. This applies both when the employee is paid/hour or gains a monthly salary.
To know whether an employee is being paid at the minimum wage, employers have to sum up all eligible hours worked for every salary period and then divide that number by the complete payment received. However, if this figure is not equal to or more than the NMW required for that employee, their salaries must be increased.
Using team management solutions, employers can calculate the appropriate wage needs for each employee according to age, thus easing NMW compliance.
Overview of Minimum Wage UK
| Name of the Article | Minimum Wage |
| Country | UK |
| Type | Hourly Rate |
| Applicable from | April 1, 2023 – March 31, 2024 |
| National Minimum Wage | £10.42 per hour |
| Visit for more | www.gov.uk |
What is the accommodation offset?
Apart from the rates of National Minimum Wage, a new accommodation offset rate is announced by the Government every year. Whenever an employer gives accommodation benefits to an employee, these are applicable. This may be offered as an employment benefit, or the employee might have to pay rent to their employer.
What is the minimum wage applied to?
All employed workers of school-leaving age and above are allowed to the National Minimum Wage, like:
- part-time workers
- full-time workers
- trainees and apprentices
- probationary employees’ working period
- non-UK workers
- disabled workers
- agricultural workers, homeworkers
- migrant workers
- and casual labourers depend offshore but are located temporarily outside the UK
However, the minimum wage does not apply to self-employed individuals or some contractors.
| Apprentice/Age | 2023 April– March 2024 | 2022 April– March 2023 | 2021 April– March 2022 |
| 23 and over | £10.42 /hour | £9.50 /hour | £8.91/hour |
| between 21 and 22 | £10.18 /hour | £9.18 /hour | £8.36/ hour |
| between 18 and 20 | £7.49 /hour | £6.83 /hour | £6.56/hour |
| below 18 | £5.28 /hour | £4.81/ hour | £4.62/hour |
| Apprentice | £5.28 /hour | £4.81/hour | £4.30/hour |
At 21, workers receive the minimum wage for their age category. From 23, employees earn the National Living Wage rate.
In 2024, the national minimum wage will be £8.60 per hour for those aged between 18 and 20 years old and £6.40 an hour for those under 17 years of age.
However, if the worker is an apprentice, the minimum wage of £5.28 is paid no matter if they are under or above 19 years old. If:
- below 19 years of age
- old and are the First Year Apprentices and aged 19 years or older.
Like, if an apprentice is aged 21 and in the first year of apprenticeship, they will be entitled to a minimum wage rate of £5.28 per hour.
If apprentices will be paid according to the national minimum wage based on their age:
- are 19 years or older
- competed the 1st Apprenticeship year
Like, if an apprentice is 21 years of age and has worked in his/her first year as an apprentice, the minimum wage to which he or she can be entitled will amount to £10.18 per hour. However, in case they have reached 25 years old and completed the initial apprenticeship year, their minimum wage is £10.42 per hour.
In the UK, the minimum wage is adjusted annually on April 1. The current minimum wage rates are applicable from April 1, 2023, to March 31, 2024.
Conditions that a person should meet in order to get the minimum wage are as follows:
- Should be at least 16 years old
- and at least 23 years of age to qualify for the national minimum wage. Workers below 22, however, are paid a different wage rate.
What is the Expected Minimum Wage Increase in 2024?
The minimum wages for workers in 2024 received a boost from the latest budget. The new rates will be effective from April 1, 2024, up to March 31, 2025.
Workers who are 21 years old and older will earn the National Minimum Wage, as stated by the Government. Presently, employees between 21 and 22 are paid differently from those who are over 23. However, this will change in 2024:
| Apprentice/Age | Minimum Wage Rate |
| 21 or more | £11.44/hour |
| between 18-20 | £8.60/hour |
| below 18 | £6.40/hour |
| apprentice | £6.40/hour |
Thus, from April 2024, workers older than 21 will earn £11.44 per hour as a salary. Workers aged between 18 and 20 will get £8.60 per hour. On the other hand, apprentices and workers below 18 years will receive £6.40 per hour.
The UK Government’s website provides further details about the changes that will be made to the minimum wage in 2024.
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Increase in the national minimum wage for the past three years:
The following shows how the NMW has risen in the past three years.
| Wage Band | New Rate (April- March 2024) | Previous Rate (April 2022 to March 2023) | Previous Rate (April 2021 to March 2022) |
|---|---|---|---|
| Apprentice | £5.28 | £4.81 | £4.30 |
| Aged 16 or 17 Young employee | £5.28 | £4.81 | £4.62 |
| Aged 18-20 Employee | £7.49 | £6.83 | £6.56 |
| Aged 21 or 22 Employee | £10.18 | £9.18 | £8.36 |
| National Living Wage | £10.42 | £8.91 | £8.91 |
| Accommodation Offset | £9.10 | £8.70 | £8.36 |
Consequences of not paying the minimum wage
It is an illegal offence for any employer to:
- Fails to pay NMW or deliberately ignores paying it.
- Failing to retain or maintain NMW records
- Willfully make or permit NMW records false entries.
- False NMW information or records as furnished by produce
- Delay or hinder the investigations undertaken by an NMW compliance officer
- Fail to answer any questions, provide information or produce documents when an NMW compliance officer requests.
- In accordance with Section 1 of the 1998 Act, any employer who violates NMW laws may be prosecuted and liable to an unlimited fine.
HMRC is the regulatory authority that ensures all workers get what they deserve. It will investigate any employer it feels is underpaying employees or falsifying records.
Employers guilty of underpaying the worker can be fined up to £20,000 per employee. They may also be disqualified for a period of not more than fifteen years from being appointed as a director of any company. The employer will be obliged to pay 200% (which was raised from 100% to 200% in 2016) of arrears within two weeks.
There is also a fine of half the underpaid salaries for that reference period, up to the amount of £20,000 per employee.
Minimum and apprentice wage
In relation to the National Minimum Wage, theNational Minimum Wage Apprentice Rate, (NMWAR) is expected to all UK apprentices below 19 and those of any age during their first year. The second year of apprenticeship means that older apprentices are now eligible for the NMW rate applicable in their age group.
The reduced wage rate is due to the nature of entry-level apprenticeship and a worker learning on the job. Much of the population opts for apprenticeships as a means to attain better pay in future by being more experienced and qualified.
How is the National Living Wage defined?
Before April 2024, NLW had a higher pay rate for workers aged 23 and over. However, the recent rise in the National Minimum Wage has attained equality with the former recommended living wage, and hence, they are now identical.
However, there is also an unofficial Living Wage, which the Living Wage Foundation calculates every year. This non-governmental body advises employers on living wages depending on the average cost of living in the UK. For 2024, they propose a Living Wage of £12 per hour.
Living wage in London
The London Living Wage is a higher rate of pay that reflects the increased cost of working and living in the city. As of April 2023, it will amount to £13.15 per hour (a rise of 90p from the previous year).
However, London employers are not legally obliged to pay this premium rate but can decide to do so as a way of attracting and hiring good employees.
What is the Real Living Wage and London Living Wage 2024?
Finally, there is one more indicator. The Living Wage is independently set by the Living Wage Foundation and is entirely voluntary. The main idea of their philosophy is that UK employees at least 18 years old should be paid enough to cover their regular living expenses. As such, it is calculated on the basis of a basket of household goods and services and is always greater than both the minimum wage and living wage.
11000 companies in UK participate in the scheme, some of them are big fish like Nationwide and Google. These rates have led to an increase in wages for 300,000 employees.
Following the other wage hikes, the real living wage increased by 10.1% in 2023 to £10.90/hour for the UK as well. The London Living Wage 2023 rate is £11.95/hour.
From April 2024, these two rates will increase by 10%. The Real Living Wage 2024 outside of London will be £12 per hour, and the London Living Wage 2024 will be £13.15 per hour.
How does a minimum wage differ from a living wage?
Three terms describe the minimum wage for employment in the UK: the National Minimum Wage, the National Living Wage, and the Living Wage. The National Living Wage is part of the National Minimum Wage and does not relate to the cost of living.
The Living Wage, also known as the Real Living Wage, is not a statutory requirement for any employer. It is a figure that represents the true cost of living in the UK, which has been published as an annual recommendation for employers who want to motivate their higher realistic employees with minimum wage.
The current Living Wage standards are £12 per hour throughout most of the UK and £13.15 for London.
What are the Benefits of Paying the Real Living Wage to Your Company?
While you are not compelled to do so, increasing your employees’ wages according to these standards could benefit your organization in many ways.
First of all, it will boost your employer branding and enable you to hire the best employees. A recent CareerWallet survey revealed that only 25% of all employees in the UK have yet to consider either a change of role or an increase in pay owing to the higher cost of living.
This highlights how much importance workers are placing on their salary. Also, a more substantial salary package will also have a positive effect on your current employees thus increasing morale and reducing the rate of employee turnover.
It is not harmful to you as an employer, either. However, improving brand perceptions only involves paying employees enough to live on rather than survive. Brand reputation is an effective tool for building customer loyalty and attracting prospects.
Managing Time Tracking and Payroll All in One Place
To be able to determine if your business is paying minimum wage, you must understand the working hours of your employees and their hourly rates. The simplest way to achieve this is through the use of time-tracking software. Factorial’s all-in-one HR solution allows you to:
- Personalize work schedules for your employees.
- Compare their actual working hours to the expected.
- With clock-in and clock-out features, track your employees’ working hours on a daily basis.
- Approve or reject timesheets instantly.
- Pay extra hours easily.
- Monitor employee absence and attendance.
- Create custom time reports.
- You can also digitise and centralise all your payroll processes using our Payroll Management software with Factorial, which makes payroll a breeze. It is possible to control employee expenses and periodic compensations as well.
Integrating time management and payroll with Factorial’s software will provide you with more insight and control. It will allow you to stay abreast of legal wage requirements and ensure that your employees are paid a reasonable salary.
Minimum Wage Calculator
The national minimum wage calculator can be found on the UK Government’s website. Individuals can access it to determine if the national minimum wages apply to them and also get an estimate of their earnings based on age and type of work.
The calculator can determine whether:
- An individual is earning a national minimum wage, and an individual is receiving a national living wage.
- Due to underpayments, an employer owes them past due payments.
- The calculator has a questionnaire that establishes what an individual wants to verify. After turning on the calculator, a user has to choose among two options to continue. After the selections, questions will be more customized and can help determine the minimum wage.
Frequently asked questions about Minimum Wage in the UK
What happened to the National Minimum Wage and Living Wage in 2023?
National minimum wage increased by roughly 9.7%, 10.8%, 9.6% and 9.7% (depending on age band) from April 1, 2023
What caused the UK Minimum Wage rates to go up?
The LPC are an independent body that provides advice to the Government on the National Living Wage and National Minimum Wage. They collectively agreed that rates would be increased in 2023 to assist low-wage earners nationwide with soaring living costs.
Does the minimum wage rise in 2024?
Yes. From April 2024, the National Minimum Wage will rise by almost 10% to £11.44 per hour above the current rate of £10.42 for individuals aged 21 and over. For those under 18 years, it will rise from £5.28 to £6.40. For 18-20 years, it will rise from £7.49 to £8.60.
How much will the minimum wage be in 2024?
It will be £11.44 for those over 21, £8.60 for those aged between 18 and 20 years, and £6.40 per hour for under workers.
What is the accommodation offset?
If the employer offers accommodation to their employees, this can be considered in calculating the minimum or living wage. This rule is referred to as the accommodation offset. It is currently £9.10 per day or £63.70 per week. From April 2024, it will be £9.99 per day or £69.93 per week.
