Minimum Wage To Increase From April 2020
From April 2020, the new rates are:
- The National Living Wage for ages 25 and above – up 6.2% to £8.72
- The National Minimum Wage for 21 to 24-year-olds – up 6.5% to £8.20
- For 18 to 20-year-olds – up 4.9% to £6.45
- For under-18s – up 4.6% to £4.55
- For apprentices – up 6.4% to £4.15
What is the minimum wage
The government sets a minimum amount you must get paid on average for the hours you work. This is called the National Minimum Wage (NMW) or the National Living Wage (NLW) if you’re aged 25 or over.
Who gets the apprentice rate
You’re entitled to the apprentice rate if you’re an apprentice aged:
- under 19
- 19 or over, and in the first year of your current apprenticeship agreement
If you’re 19 or over and have completed the first year of your current apprenticeship, you’re entitled to the minimum wage for your age.
Who gets the minimum wage
Anyone who is employed as an employee or worker must get the National Minimum Wage or National Living Wage.
This is whether they are:
- full time
- part time
- doing training essential for the job
- working in a small or ‘start-up’ business
It also applies to:
- agency workers
- agricultural workers
- casual labourers, for example someone hired for one day
- casual workers
- employees on probation
- foreign workers
- home workers
- offshore workers
- workers paid by commission
- workers paid by the number of items made (piece work)
- zero-hours workers
The only types of work that are not covered are those who are:
- self-employed (by choice)
- a volunteer (by choice)
- a company director
- in the armed forces
- doing work experience as part of a course
- work shadowing
- under school leaving age
If you live in your employer’s home
You’re entitled to the correct minimum wage if you live in your employer’s home, unless:
- you’re a member of their family
- you’re not a family member but share work and leisure activities and are not charged for meals or accommodation, for example an au pair
Check if you are getting minimum wage
Use the National Minimum Wage and National Living Wage calculator on GOV.UK to check if:
- you’re getting paid the National Minimum Wage or National Living Wage
- you’ve been paid correctly in previous years
On average, you must get the minimum wage for each ‘pay reference period’ (the period of time your pay covers).
You work out your average hourly rate using:
- your total (‘gross’) pay each time you’re paid
- how many hours you worked for that pay
You are paid weekly, work 40 hours a week and your weekly salary is £346.15 (before tax is taken out). You are 25 years old.
Your average hourly rate is £8.65 (£346.15 divided by 40). This is above the minimum wage for a worker aged 25.
What does not count towards the minimum wage
Some parts of your pay do not count towards minimum wage. These parts include:
- tips and gratuities
- premium payments (for example, extra pay for working bank holidays or overtime)
- a loan from your employer
- a pay advance
You are 22 years old, paid weekly and work 45 hours a week.
Your total weekly pay before tax is usually £400. This usually includes £100 in tips, so you’ll need to use £300 as the starting point to work out if you’re getting the minimum wage.
Your average hourly rate is £6.67 (£300 divided by 45). This is below the minimum wage for a worker aged 22. Your employer needs to pay you at least £7.70 an hour not including tips.
Commission counts towards minimum wage.
Your total pay including commission must give you the minimum wage each time you’re paid.
Your employer must ‘top up’ your pay if you have not made enough commission to earn the minimum wage.
What can be deducted from the minimum wage
Your employer is allowed to make some deductions that could leave you with less than the National Minimum Wage or National Living Wage in your take-home pay. This includes:
- tax and National Insurance contributions
- paying back an advance or overpayment
- pension contributions
- trade union fees
- a charge for accommodation provided by your employer (see accommodation rate information on GOV.UK)
What cannot be deducted from the minimum wage
Some pay deductions and work-related expenses cannot reduce your pay below the minimum wage.
- travel costs (except getting to and from work)
- training courses
For example, you might be required to buy a uniform for work. This is allowed as long as your total pay minus the uniform cost is still above the minimum wage.