Legal update: New wage and statutory payment rates from April 2023

The Government reviews the minimum wage rates every year and they’re usually updated in April. The new rates which are effective from the first pay period on or after 1 April 2023 are listed below.

The National Living Wage applies to those employees or workers aged 23 or over, and the National Minimum Wage for those employees or workers aged under 23 or an apprentice.

Those who are entitled to receive the apprentice rate must be aged under 19, or 19 and over and in the first year of their apprenticeship agreement. If an apprentice is 19 or over and has completed their first year of their current apprenticeship, they are entitled to be paid at least the minimum wages for their age.

The new rates:

• Age 23 or over (National Living Wage) – £10.42 an hour (increase from £9.50).
• Age 21 to 22 – £10.18 an hour (increase from £9.18).
• Age 18 to 20 – £7.49 an hour (increase from £6.83).
• Under 18 – £5.28 an hour (increase from £4.81).
• Apprentices – £5.28 an hour (increase from £4.81).

It’s important to make sure that pay is increased in line with any birthdays, or work anniversaries for apprentices moving into their second year.

Increases to other statutory payments

As well as the National Living Wage and the National Minimum Wage rising in April 2023, there will also be increases to other statutory payments. The increases will be as follows:

Statutory Sick Pay

Weekly rate: £109.40 for employees (from £99.35) as long as they earn on average at least £123.00 a week (known as the Lower Earnings Limit) and have been ill for at least 4 days in a row.

Statutory Maternity Pay & Statutory Adoption Pay

Earnings-related rate: 90% of average weekly earnings (before tax) for the first six weeks of the SMP/SAP period for employees who have earned on average at least £123.00 a week (known as the Lower Earnings Limit), along with other eligibility criteria.

Basic weekly rate: Lesser of earnings-related rate or £172.48 (from £156.66) payable after the first six weeks of the SMP/SAP period.

Statutory Paternity Pay, Statutory Parental Bereavement Pay & Shared Parental Pay

Lesser of 90% of average weekly earnings or £172.48 (from £156.66) for the entire SPP/SPBL/ShPP period for employees who earn on average at least £123.00 a week (known as the Lower Earnings Limit) along with other eligibility criteria.

Auto-enrolment

Auto-enrolment pension contributions remain static with a total minimum contribution of 8% – employer must make a minimum contribution of 3% and the employee must make a 5% minimum contribution.

 

Need any more support?

If you’ve got any questions about the new rates or pay queries in general, simply call your 24/7 advice line on 0345 844 4848.