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Living Wage Update April 2023
With another new tax year reached on April 6th 2023, it bought with it an increase to the national minimum wage. Since the changes the new hourly rates are:
TAX BRACKET | BEFORE | AFTER | INCREASE |
Apprentice Rate | £4.81 | £5.28 | 47p |
16-17 Year Old Rate | £4.81 | £5.28 | 47p |
18-20 Year Old Rate | £6.83 | £7.49 | 66p |
21-22 Year Old Rate | £9.18 | £10.18 | £1.00 |
National Minimum Wage | £9.50 | £10.42 | 92p |
Living Wage rate
Each rate has seen an increase of 9.7% apart from the 21-22 Year Old Rate which has increased by 10.9%.
The real living wage will also see an increase in April 2023 which is set to rise to £10.90 for the whole of the UK (with the exception of London which will be £11.95), but even with these rises many people will still be earning below the threshold of the real living wage.
Your personal tax allowance will be unchanged at £12,750 if you are on a standard tax code, but it should be noted that if you live in Scotland, the tax brackets are different and should be referred to on the Scottish Government website if you are on a different tax code and unsure.
As the calculation of your personal tax allowance can differ greatly depending on which tax code you are in, it is important to ensure your tax code is the correct one. Should you feel a mistake has been made it is recommended to contact HMRC.
Does it affect UCC Contractors?
Even if you are paid above NMW, it still affects you as an employee of UCC. You will note on your pay slip that the payment is split between ‘basic rate’ and ‘Discretionary Profit Share Bonus’. (https://www.uccontractors.com/umbrella-payments-explained/) Therefore, your ‘Basic rate’ has increased to ensure that this is above the new NMW.
Also at the beginning of every tax year, most employees note a change in their payments; please be assured that this is normal and things to even out after a couple of weeks (if you are paid weekly).
Please feel free to get in touch with us if you would like to discuss these changes further or head on over to the UK Government website for a more in depth look: https://www.gov.uk/government/publications/minimum-wage-rates-for-2023
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