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The National Minimum Wage - Payroll Informational from Allum Book-keeping Services

Employers are obliged to pay their workers a minimum hourly rate of pay, know as the National Minimum Wage (NMW). The rate of the National Minimum Wage is defined by law, and applies to most workers in the UK over school leaving age, with certain exceptions, including:

  • Voluntary workers
  • Family members of the employer living in the employer's home
  • Children of compulsory school age
  • Self-employed individuals
  • Directors of companies who do not have an employment contract

Separate rates of pay apply to agricultural workers.

The National Minimum Wage's rate is reviewed on an annual basis, with the updated rates published each October. There are different rates of National Minimum Wage applying to different groups of workers, which are:

  • The main rate for workers aged 21 and over
  • The 18-20 year old rate
  • The 16-17 year old rate
  • The apprentice rate for apprentices under 19, or in the first year of their apprenticeship

Although the rules are complex, but as a generally guide benefits in kind, expenses, certain allowances and most deductions are not included when calculation the National Minimum Wage. Job-related travelling and training time is included in the calculation, but periods of absence, holiday, rest breaks or industrial action do not count.

There are special rules for workers who are not paid according to the number of hours they are at work.

Employers have to retain records to demonstrate payment on the National Minimum Wage. These must be kept for 3 years.

Any qualifying indivduals whose employers fail to pay them the National Minimum Wage may apply to a court or tribunal, and they will be protected against any loss suffered. Employer failing to pay the NMW are liable to financial penalties and can even be convicted of a criminal offence.

We can advise you on the latest NMW rates. For expert assistance with your payroll need please contact Allum Book-keeping Services today.

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