National Minimum Wage
The national minimum wage is going up as of the 1st of April 2017:
Workers aged 25 and up will see an increase from £7.30 per hour to £7.50 per hour, a rise of 4.2 per cent.
Employees aged between 21 and 24 will receive a NMW of £7.05 per hour, up from £6.95, while those aged 18 to 20 will get £5.60, up from £5.55.
Workers aged 16 or 17 will be eligible for a NMW of £4.05 per hour, up from £4. The rate of pay for apprentices will also increase by 10p per hour, up to £3.50.
Lower earnings limit
The lower earnings limit has increased from £112 to £113.
Paternity, Adoption & Shared Parental Leave and Sick pay
The standard rate for Paternity, Adoption and Shared Parental Leave is going up from £139.58 up to £140.98.
The rate for Sick pay is going up too from £88.45 to £89.35
Key changes to Salary sacrifice schemes
Employers should also be aware that HMRC is starting a consultation to change salary sacrifice schemes such as:
- Company Cars
- Gym memberships
- Car parking
- Work related training
- Mobile telephones
- School fees (private school employees)
In the 2016 Budget the Government announced that it was considering limiting the range of benefits that attract income tax and NIC savings when provided as part of a salary sacrifice arrangement. The consultation document published proposes that, with effect from 6 April 2017, the only salary sacrifice arrangements that will continue to attract income tax and/or NIC savings will be:
- Pension contributions
- Employer provided pension advice
- Employer supported childcare and provision of workplace nurseries
- Cycles and cyclist’s safety equipment (Cycle to work schemes)
- Apprentice Levy
As of 6th April the apprenticeship levy will apply for large companies.
Employers with an annual payroll of more than £3 million will be required to pay a 0.5% levy on their total pay bill. Large employers will be able to access levied amounts, plus a government top-up of 10%, to fund apprenticeships from accredited training providers. Smaller organisations that are not required to pay the levy will also be able to receive funding for accredited apprenticeships by contributing 10% towards the cost of an apprenticeship, with the Government paying the remaining cost.
Tax free Child Care for workers
Parents will be able to open an online account, which they can use to pay for childcare from a registered provider.
For every £8 a parent pays in, the government will pay in an extra £2. Parents can receive up to £2,000 per child, per year, towards their childcare costs, or £4,000 for children with disabilities.
The scheme will be available for children up to the age of 12, or 17 for children with disabilities. To qualify, parents will have to be in work, and each expecting to earn at least £115 a week. Each parent must not have income over £100,000 per year