Changes to minimum wages in 2023
Posted on 20th December 2022
The government sets the minimum amount employees must be paid on average for the hours they work. This is called the National Minimum Wage (NMW) or the National Living Wage (NLW) for employees aged 23 or over. The rate increases each year on 1 April.
For NLW employees working 37.5 hours per week, the increase will add more than £1,650 annually or £138 per month.
NLW and NMW changes for 2023
The new rates are based on the recommendations of the Low Pay Commission, which were accepted by the Chancellor in the Autumn Statement in November. The National Living Wage will increase by 9.7% or 92p, so the hourly rate will be £10.42.
There are also significant increases in the NMW rates for younger workers which will narrow the gap to the NLW.
For 21 and 22-year-olds the increase will be 10.9%, an increase of £1.00 per hour to £10.18
For 18 to 20-year-olds, 16 to 17-year-olds and apprentices the increase will also be 9.7% or 66p and 47p respectively.
This means the government remains on track to achieve its target for the NLW to reach 66.7% of median earnings by 2024.
At a glance - National Living Wage rates for 2023/24
|
|
Rate from April 2023 |
Increase |
% |
|
National Living Wage for people aged 23 and above |
£10.42 |
£0.92 |
9.7% |
|
21 to 22-year-olds |
£10.18 |
£1.00 |
10.9% |
|
18 to 20-year-olds |
£7.49 |
£0.66 |
9.7% |
|
16 to 17-year-olds |
£5.28 |
£0.47 |
9.7% |
|
Apprentice rate |
£5.28 |
£0,47 |
9.7% |
|
Accommodation offset |
£9.10 |
£0.40 |
4.6% |
Source: Low Pay Commission recommendations. * National living wage.
Who receives the NLW and NMW
These rates apply to people who are:
part-time
casual labourers, hired for one day at a time, for example
agency workers
workers and homeworkers paid by the number of items they make
apprentices
trainees and workers on probation
disabled workers
agricultural workers
foreign workers
seafarers
offshore workers.
Apprentices
The apprentice rate applies for people who are either:
aged under 19
aged 19 or over and in the first year of an apprenticeship.
Apprentices over 19 who have completed the first year of their apprenticeship are entitled to the correct minimum wage for their age.
Who doesn’t receive the NLW or NMW
Employment status and other categories of work mean that some people don’t qualify for the NLW or NMW. This affects:
self-employed people running their own business
company directors
people who are volunteers or voluntary workers for charities, voluntary organisations or statutory bodies who receive limited benefits such as travel expenses
people on a government employment programme
members of the armed forces
family members of an employer who live in the employer’s home
non-family members living in the employer’s home who share in work and leisure activities, who are treated as one of the family and are not charged for meals or accommodation, such as au pairs, for example
workers younger than school leaving age (usually 16)
students in higher and further education, in work experience or a work placement for up to one year
people shadowing others at work
people on government pre-apprenticeship schemes
people following certain EU programmes
people working on a Jobcentre Plus Work trial for up to six weeks
share fishermen
prisoners
people living and working in a religious community.
You can use the government’s minimum wage calculator to check entitlements.
Tagged as: national living wage, national minimum wage
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