Employment tax
Our employment tax & reward team helps organisations to grow, mitigate and navigate their tax risks more effectively.
We set out our thoughts and updates below.
From 1 April, the NMW rates are as follows:
Rate from April 2020 | Rate from April 2021 | % increase | ||
National Living Wage | £8.72 | £8.91 | 2.2% | |
21-22 (21-24 up to 31 March 2021) Year Old Rate | £8.20 | £8.36 | 2.0% | |
18-20 Year Old Rate | £6.45 | £6.56 | 1.7% | |
16-17 Year Old Rate | £4.55 | £4.62 | 1.5% | |
Apprentice Rate | £4.15 | £4.30 | 3.6% | |
Accommodation Offset | £8.20 | £8.36 | 2.0% |
This represents an increase at each rate between 1.5% to 3.6% for most workers. However the key change to be aware of is the NMW rate for those aged 23 and 24. From 1 April, this increases to £8.91 per hour, an increase of over 8.5% on the current rate for these workers.
Additionally, employers will have to factor in the following:
One aspect employers can consider to off-set the rising NMW costs is employing apprentices. Now, although the apprenticeship NMW rate is lower than that for 23 year olds, you could pay slightly higher than the apprenticeship NMW rate to recruit the best talent and ensure you are an employer that takes reward seriously.
By utilising apprenticeships it can:
NMW is not all about HMRC investigations. It can be about reward planning, organisational design and considering the broader ways in which compliance can be achieved, costs managed and overall reward maximised.
Please do get in touch if you would like to discuss any elements related to reward strategy, apprenticeships or NMW.
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