Salary costs will be one of your biggest expenses as a small business owner, so it pays to keep on top of changes to the National Minimum Wage (NWM) and National Living Wage.
Why should a small business owner have this on the radar?
Obviously if you use us to run your payroll we’ll notify you and set up the adjustments to payroll as part of our service. It could, however, have a knock on effect on your payscales. There is no legal requirement to increase any wages that will already be at or above the new minimum wage on 1st April 2017.
However if you pay one worker £7.20 per hour and another more experienced worker £8.20 per hour, on 1st April 2017 the pay gap between then will decrease from £1 per hour to 70p per hour. You may want to look at all or several of the pay rates used in your company.
And regardless of changing other rates of pay you’ll definitely want to budget for the increased wages if you’ve not already factored this into your 2017-18 financial planning. And of course, you can always ask us for help with budgeting and management accounts.
Details of the increases are shown in the table below. If you have any questions about how this will affect your payroll why not pick up the phone and give us a call?