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Why is £24000 so important to the National Minimum Wage?



National minimum wage

National Minimum wage rates popped up another level on 1 April 2024


From 1 April 2024, workers aged 21 and over will be entitled to the National Living Wage and are summarised below.









21 and over

18 to 20

Under 18

Apprentice

April 2024

£11.44

£8.60 

£6.40 

£6.40 

The full rates can be found at HMRC's website.


This creates a problem for the payroll departments, particularly in general practice. Often the processing is remote from the workers making it difficult to know the hours worked.


£24000

A simple calculation for an employee working 40 hours a week, 52 weeks per annum and over 21 years old:


£11.44 x 52 weeks x 40 hours = £23795


Rounding this up means the minimum wage for this scenario is £24000.


Ok, different figures and hours worked will give a different answer. However, the principle is valid.


The added issue for some employers is the top age banding has dipped down from 23 to 21 years old.


The combination of the increase in rates and lowering the age limits could, let's be honest will, catch some employers out. Add to that issues over what hours have actually been worked and problems will arise


Action plan

If you are running a payroll department for a range of clients

  1. Ensure all clients know about the change of rates

  2. Your software might flag up issues but do not rely on it to spot all breaches - so have systems in place

  3. The reporting of hours worked to HMRC on monthly filings is to commence in April 2025 but why not bring that forward for your internal records? Ask clients to confirm hours worked with the payroll details they send to you.


And watch our National Minimum Wage training webinar designed for General Accountancy Payroll departments.




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