New National Minimum and Living Wage Rates in April 2025

Helping your business adapt

The National Minimum Wage (NMW) and National Living Wage (NLW) are set to rise in April 2025, bringing important changes for UK businesses. These adjustments aim to ensure fair pay for workers across different age groups, but they also present challenges for employers managing payroll and budgets.
This blog explores the new rates, their implications for businesses, and practical strategies to prepare effectively for the upcoming changes.

What Are the New Rates?

Starting April 2025, the revised hourly wage rates are:

  • 21 and over (NLW): £12.21 per hour
  • 18 to 20: £10.00 per hour.
  • Under 18: £7.55 per hour
  • Apprentice: £7.55 per hour
 

Key Highlights:

  1. Workers aged 21 and over benefit from the National Living Wage, while younger employees fall under the National Minimum Wage categories.
  2. Apprentices in their first year or under the age of 19 receive a specific rate (£7.55). Once they complete the first year and are 19 or older, they’re entitled to the rate for their age group.
 

What This Means for Businesses

The rise in minimum and living wages impacts businesses in several ways. While these changes promote fair compensation, they also mean higher payroll costs for employers. Here’s what you need to consider:

Financial Impact: 

  • Reassess your payroll budget to account for increased wage bills. 
  • Identify cost-saving measures or operational efficiencies to offset the rise.

Compliance is Key: 

  • Employers are legally required to pay at least the updated rates. Non-compliance can result in penalties and reputational damage.
  • Use payroll tools or calculators to ensure all employees receive the correct pay.

Maintaining Employee Morale: 

  • Pay adjustments provide an opportunity to reinforce your commitment to fair treatment.
  • Transparent communication about wage changes can strengthen trust and employee engagement.
 

 Preparing for the Change

Proactive planning is essential to smoothly transition to the new rates. Here are some actionable steps:

  • Audit Your Payroll Systems: Update your payroll software or consult your provider to ensure it reflects the new rates.
  • Review Staffing Costs: Evaluate the overall impact of the wage increases on your workforce and adjust your hiring or scheduling plans accordingly.
  • Communicate with Employees: Inform your team about the changes and what they mean for their earnings. Highlight the value of these adjustments in reflecting their contributions.
  • Plan for Growth: Use this shift as an opportunity to review your broader business strategy, including pricing, efficiency improvements, and workforce development.
 

Real-World Scenarios:

  • For Small Businesses: A shop owner with three full-time employees aged 21 or over will need to budget for an additional £1.79 per hour, per employee. Over a 40-hour workweek, this means an increase of £214.80 weekly for the team.
  • For Apprentices: An apprentice aged 21 in the first year of their apprenticeship will earn £7.55 per hour. If they progress to their second year, their hourly rate will jump to £12.21, significantly boosting their earnings.
 
Staying ahead of payroll changes is vital for running a compliant and efficient business. At Intelligent Payroll, we’re experts in simplifying payroll processes and ensuring compliance with the latest regulations.
Let us help you adapt to the April 2025 changes with ease. Contact us today for tailored payroll solutions that save you time, reduce stress, and keep your business moving forward.

=======================================

Need help with payroll… 

For more information, contact us today or book a demo.

Facebook
Twitter
LinkedIn

We use cookies and similar technologies to enable services and functionality on our site and to understand your interaction with our service. By clicking accept, you agree to our use of such technologies for marketing and analytics.​