The National Living Wage (for those aged 23 and over) and the National Minimum Wage (for those of at least school leaving age) will increase from the 1st April 2022. The rates change on 1st April every year, the current rates and those for the new year are:
More info from HMRC is available here.
If you operate a salary for an employee who is not a director of the Limited Company, it is important to review their working hours and rate paid, to ensure they do not fall below the National Minimum Wage and the National Living Wage rates. Please get in touch with your dedicated accountant to discuss this in more detail if you are not sure.
You can also perform a manual calculation by taking the total number of hours worked per week by the employee, and multiplying by the number of weeks in a year. Then, divide this number from the annual salary before any deductions.
For example, if an employee has a gross salary of £31,772 and works 36.2 hours per week, the hourly rate is £31,772 / 1,882.4 hours (36.2 hours x 52 weeks ) = £16.87 per hour.
Nice to know: According to the Office for National Statistics, the average actual weekly hours of work for full-time workers (seasonally adjusted) to 31st December 2021 was 36.2 hours per week, and the average full-time salary in the UK in April 2021 was £31,772.
Further details including the recommended directors salary for next year, will be sent at the start of the new tax year.
If you would like to make any changes to your employees rates of pay, in April 2022, please get in touch with your dedicated accountant to discuss this in more detail or email the payroll team.
We will aim to be in touch with any clients that wish to operate a payroll that is below the National Minimum Wage and National Living Wage, however it is your responsibility as the business owner, to ensure any employees are receiving the correct rate of pay.
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