Small business payroll service
As usual, National Minimum Wage rates will increase in April. The hourly rates for 2025 are:
Apprentice* U18 18-20 21 and over £7.55 £7.55 £10 £12.21 *If under 19 or in first year of apprenticeship (otherwise refer to age bands).
Statutory Sick Pay increases from £116.75 to £118.75 per week.
Parenting pay (maternity, paternity, adoption pay) rises from £184.03 to £187.18 per week.
If your company has underpaid its workers, the consequences could be severe:
You must pay arrears to the worker immediately and you may end up paying more than you would have if you had paid the correct amount to start with. In one instance, a national retailer was forced to make back payments of £193,000 for almost 3,500 workers after it required them to be at work before and after opening hours without pay.
HMRC will now publicly name any employer, big or small, who breaks minimum wage law.
On top of the arrears, employers risk financial penalties of up to £20,000.
Criminal prosecution is rare but the most serious cases can be heard in a Crown Court, meaning that there’s a potential for an unlimited fine.
HMRC have the power to check your wages at any time – it’s your responsibility as an employer to keep records proving compliance with NMW and you have to keep these for 3 years. You could be randomly targeted or a worker’s complaint could trigger an investigation.
Out of the blue, our biggest client received a random minimum wage inspection. The HMRC inspectors spent a full day digging into the payroll and payment records.
We handled the entire assessment on behalf of our client and were happy to host the compliance team at our premises. They delved into the current year’s files as well as the previous three years’ files, picking staff at random and tracing their wages from timesheet to bank account.
We spent the day making them tea and being quizzed in depth, using paper and electronic records to prove compliance. With a good understanding of the business, we could answer HMRC’s questions with confidence.
The client passed the inspection with flying colours.
The rates change in April each year. Rates for previous years can be found at gov.uk.
A good payroll provider will watch out for NMW compliance issues as part of the service.
ACAS gives free impartial advice to employers and workers.
Follow this link to report NMW breaches.
This article updated Oct 2024.
Image credit: University of Liverpool Faculty of Health (CC BY 2.0)
National Minimum Wage rates will increase in April, and staff aged 21 and over are now brought into the top band. The hourly rates for 2024 are:
Apprentice* U18 18-20 21 and over £6.40 £6.40 £8.60 £11.44 *If under 19 or in first year of apprenticeship (otherwise refer to age bands).
Statutory Sick Pay increases from £109.40 to £116.75 per week.
Parenting pay (maternity, paternity, adoption pay) rises from £172.48 to £184.03 per week.
