1st April 2024 marked crucial updates regarding statutory rates and allowances coming into effect.
We understand that employment changes can be complex and overwhelming at times, which is why we’ve asked Kim Dulson, Head of the Stoke Payroll team, to outline everything you need to know.
Take it away Kim
As confirmed late last year, the government has accepted the Low Pay Commission’s (LPC) recommendations on the raising of both National Minimum Wage (NMW) and National Living Wage (NLW).
The effects to National Living Wage (NLW) rates took effect from 1 April 2024, along with other crucial updates.
To help you understand the changes as an employer, I’ve highlighted the updates below.
National minimum wage and living wage
On 1 April 2024, the National Living Wage increased to £11.44 an hour, from £10.42. This change will be adjusted so that those age 21 and over are included.
The national minimum wage increases are as follows:
- £6.40 an hour (from £5.28) for workers 16-17.
- £8.60 an hour (from £7.49) for workers aged 18-20.
- £6.40 an hour (from £5.28) for apprentices.
It’s crucial to note that failure to meet these requirements can lead to team members potentially raising grievances and/or bringing in claims, resulting in HMRC taking enforcement action.
Statutory Rate Changes
Alongside minimum wage increases, Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Shared Parental Pay and Parental Bereavement Leave will increase from £172.48 per week to £184.03 per week.
Statutory Sick Pay will increase from £109.40 per week to £116.75 per week.
Statutory Guarantee Pay (SGP) is the payment made whilst an employee is laid off, in other words asked not to work. This is a daily rate paid on any days where an employee is laid off, to a maximum of a normal working week, every 13 weeks. From 6 April 2024, the daily rate is £38.
Employment Allowance
The Employment Allowance remains at £5,000 for eligible employers. Previous rates may however still be relevant, as you can claim up to four years after the end of a particular tax year.
If you think your business is eligible to claim the allowance for previous years, here is what you can claim:
- 2020-2022: Up to £4,000
- April 2022 onwards: Up to £5,000
These amounts are applicable to the tax year, but they are taken on a payroll-by-payroll basis. In other words, don’t wait until the end of the year to claim relief! Instead, make sure proportionate amounts are applied each time you then process payroll with HMRC
Employee National Insurance rates
From 1 April 2024, the Employees rate for National Insurance reduced again from 10% to 8%. It had changed from 12% to 10% in January 2024.
The rate for earnings over £50,270 has stayed at 2%.
Apprenticeship Levy
The Apprenticeship Levy will continue to apply for companies and/or connected companies, where the pay bill is more than £3 million.
For new starts from 1 April 2024 onwards, where the employer does not pay the apprenticeship levy, the government will fund all the apprenticeship training costs, up to the funding band maximum for apprentices who are aged between 16 and 21 years old when they start their apprenticeship.
Here to help
If you have any questions or concerns about the new changes, our team are here to help. To get in touch with our experts, please fill out the form below and someone will contact you shortly.
