Insight
Publish date
26 March 2025
National minimum wage increase from 1 April 2025
The National Minimum Wage (NMW) is the minimum pay per hour almost all workers are entitled to. The NMW is shown as an hourly rate, however, it applies to all eligible workers even if they are not paid hourly.
From 1 April 2025 the following rates will apply:
| Current Rates (April 2024 to 31 March 2025) | Rates from 1 April 2025 | Increase (%) | |
| National Living Wage (NLW) (21 and over) | £11.44 | £12.21 | 6.7% |
| 18-20 Year Old | £8.60 | £10.00 | 16.3% |
| 16-17 Year Old | £6.40 | £7.55 | 18.0% |
| Apprentice Rate | £6.40 | £7.55 | 18.0% |
| Accommodation Offset | £10.59 | £10.66 | 6.7% |
Who is entitled to the National Minimum Wage?
Anyone who is an employee or a worker must get the NMW or NLW regardless of whether they are full time, part time, doing essential training or working in a small or start up business. It also applies to agency workers, agricultural workers, apprentices, casual labourers, casual workers, employees on probation, workers paid by commission, piece workers and zero-hours workers.
How and when do I start paying my employees the higher rate?
The higher rate starts to apply from the next ‘pay reference period’ after the increase. The ‘pay reference period’ is the period of time the pay covers, for example the period will be 1 week, if paid weekly, or 1 month, if paid monthly. The period cannot be longer than a month. So if there is a NMW increase on 1 April, for example, the worker (Mark) gets paid on the 10th of the month. The old rate will apply until the next pay reference period starts on 11th April. As a minimum, Mark should get paid the old rate for 1 April to 10th April and the new rate for 11th April to 10th May.
What should employers be aware of?
The changes should spur employers to review the measures they have in place to ensure that they do not inadvertently pay staff less than what they are entitled to. Payroll systems should be reviewed at the same time to ensure that staff payment details and information are up to date. Employers will also need to ensure that their payroll systems flag when an employee is approaching key birthdays, so that they can check whether that employee’s pay needs to be increased to meet NMW requirements.
The above measures are extremely important and it is fundamental that employers ensure that they are adhering to the NMW rates as non-compliance of the NMW can lead to civil penalties, “naming and shaming”, recovery of underpayments through tribunals or civil courts, and criminal prosecution.
Additionally, employers should consider workers in the payment band above those whose wages are being increased in line with NMW. For recruitment and retention purposes employer should ensure that an appropriate wage differential is maintained.
Please get in touch if you have any questions.
