The Cost of Being an Employer
A new financial year is on the horizon, and this means cost implications for employers.
As from April 2019 there are significant increases in the National Living Wage (NLW)/National Minimum Wage (NMW), and pension contributions.
National Living Wage (NLW) and National Minimum Wage (NMW) Increases – April 2019
The hourly rate for the minimum wage depends on the age of an employee, and whether they are an apprentice. An employee must be of school leaving age to receive the National Minimum Wage (NMW). The National Living Wage (NLW) is payable to workers aged 25 years or older. Although separate rates apply to apprentices engaged by an organisation.
The table below shows the relevant current and revised rate for the NLW and NMW;
|Year||25 and over||21 to 24||18 to 20||Under 18||Apprentice|
|April 2018 (current rate)||£7.83||£7.38||£5.90||£4.20||£3.70|
The increase in the NLW is notable which is at the rate 4.9% which is a significant rise.
Pension Auto-Enrolment Increases – April 2019
In addition to costs associated with the NMW/NLW
The auto enrolment minimum is currently 5% of qualifying earnings of which at least 2% must be paid by the employer. In April 2019 this rises again to the level of 8% of qualifying earnings of which at least 3% must be paid by the employer.
|Date||Employer minimum contribution||Employee minimum contribution||Total minimum contribution|
|6 April 2018 – 5 April 2019||2%||3%||5%|
|6 April 2019 onwards||3%||5%||8%|
The cost of being an employer is constantly increasing, and many employers are not aware of this change,
If you need further advice, please do not hesitate to contact Atom HR.