Paying your Employees the right hourly rate
National Living Wage / National Minimum Wage for 2020/2021
The National Living Wage and the national Minimum Wage rates are due to increase in April 2020. The rates (as published by www.gov.uk) for the 2020/2021 tax year are:
Year 25 and Over 21 to 24 18 to 20 under 18 Apprentice
April 2019 (current) £8.20 £7.70 £6.15 £4.35 £3.90
April 2020 £8.72 £8.20 £6.45 £4.55 £4.15
Real Living wage (and London Living Wage)
The ‘national living wage’ is paid at the same rate for the whole country with no allowance for the higher costs of living in the capital. The Real Living Wage, on the other hand, is independently calculated, voluntary and based on the cost of living. The Real Living Wage has different rates for London and the rest of the country, recognising the higher costs of living in London.
The London Living Wage rate is £10.75 per hour
The rate for the rest of the UK is £9.30 per hour. Some London Boroughs have signed up to the ‘Living Wage’ so please check with your local authority to see if this applies to your employees.
As part of your direct payment or personal health budget you should be provided with an hourly rate to pay your employees. Your funded amount may include amounts to cover additional costs such as insurance, Payroll costs, and employer national insurance and Pension contributions, therefore please check this before putting through the rate to pay your employee, or commissioning third party agencies.
All rates paid to employees are Gross, and therefore are subject to tax and national insurance as well as any other statutory deductions should they be due.
Please make sure that you contact your funding body to check that the correct funds will be paid to you to cover any changes in rates of pay to your employees. It is the law to pay at least the national minimum wage, and therefore should be covered by your budget.