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Big rises in Living and Minimum wages

Big increases in minimum pay levels kick in this April and the extra costs are almost £2,000 extra per year for each full-time employee aged 23 at least.

From April 2023 employers have to pay a legal minimum of £10.42 an hour for any employees over 23, which is an increase of nearly £1 per hour.  There are lower minimum pay levels for people under 23.

There is also a voluntary “real” Living Wage campaign which is £10.90 per hour outside London and £11.05 per hour in London.

Other statutory (legal minimum) increases include sick, maternity and paternity pay are also rising: sick pay from £99.35 to £109.40 per week and the ‘standard rate’ for maternity allowance, maternity and paternity pa from £156.66 o £172.48 per week.

Let’s set out what this means in terms of pay and start with the compulsory amounts, which depend on how long your working week is.

The compulsory minimum pay levels from 1st April 2023 are:

Age/ TypePer hourAnnual salary for working 37.5 hours per weekAnnual salary for working 40 hours per week
23 and above£10.42£20,319£21,673.60
Under 18£5.28£10,296£10,982.40
Living Wage£10.90£21,255£22,672

What’s the difference between a minimum Wage and a Living Wage? The “real” Living Wage at £10.90 involves paying everyone aged older than 18 salaries of £21,255-£22,672, depending on the length of your working week.

If you pay everyone at least £10.90 an hour, then you can get recognition for this by signing up to the “real” Living Wage at http://livingwagebrighton.co.uk/. It’s free, it only takes a few minutes and it means you get credit for being a good payer for prospective new recruits, which should help with hiring.

Statutory pay levels for sickness and parental leave (including maternity) have also increased. The new rates are £99.35 a week for SSP sickness absence and £156.66 a week for maternity, paternity, adoption, shared parental and parental bereavement pay.

Redundancy payments have also increased, to a weekly maximum of £571 (the equivalent of an annual salary of £29,692). So if you are planning to make redundancies and the employees have been with you for more than 2 years, your payments might now be a little higher.


By Brian

Updated with the new pay levels from April 2023.



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