Newsletter Autumn 2015

Wages - plan ahead

With luck the employees you take on now will stay with your business for at least six months, so you need to look ahead to the payroll charges and discounts that will apply to wages from April 2016 onwards.

The wages of young workers aged under 21 are already free of employer's National Insurance Contributions (NIC), as long as they earn no more than £815 per week.

The wages paid to apprentices will also be free of employer's class 1 NIC from 6 April 2016, while the individual is aged under 25. There will be a similar cap for the NIC exemption on the apprentice's pay of around £800 per week.

As announced in the Summer Budget, the National Minimum Wage (NMW) for those aged 25 and older will be set at £7.20 per hour from April 2016. All other NMW rates increase from 1 October 2015. The main NMW rate, for those aged 21 and over, rises from £6.50 to £6.70 per hour.

It is essential that you identify when an employee has moved into a new age band in order to pay the full NMW due from that point, as the maximum penalty for failing to pay the right amount is now £20,000 per worker.