National Minimum Wage Rates Increase From 1 October 2016

Reminder for employers that National Minimum Wage rates increase from 1 October 2016

National Minimum Wage rates increase from 1 October 2016.

The new rates are:

  • 21 to 24 years old – £6.95 per hour
  • 18 to 20 years old – £5.55 per hour
  • 16 to 17 years old – £4.00 per hour
  • Apprentice Rate – £3.40 per hour

In addition, the accommodation offset increases to £6.00.

For workers aged 25 and over, the National Living Wage of £7.20 was introduced on 1 April 2016.

National Minimum Wage and National Living Wage – rates and overview

National Minimum Wage and National Living Wage rates

The following rates are for the National Minimum Wage and the new National Living Wage from 1 October 2016.

The new National Living Wage is £7.20 per hour for workers aged 25 years old and over. The National Minimum Wage still applies for workers aged 21 to 24 years of age.

Current rates

  • 25 years old and over – £7.20 per hour
  • 21 to 24 years old – £6.95 per hour
  • 18 to 20 years old – £5.55 per hour
  • Under 18 years old and above school leaving age – £4.00 per hour
  • Apprentices under the age of 19 years old or aged 19 years old or over and in the first year of their apprenticeship – £3.40 per hour (this rate does not apply to Higher Level Apprenticeships)

All other apprentices are entitled to the minimum wage for their age.

It is good practice to display information about current rates in your workplace.

National Minimum Wage rates change every October. National Living Wage rates change every April.

If a worker is entitled to the National Minimum Wage or National Living Wage, you must pay them at least the rate they are entitled to for the hours of work that qualify. You cannot make an agreement with a worker to pay them less than the minimum wage rate.

Which rate applies to a worker?

You need to know which rate applies to a worker – based on their entitlement at the start of each pay reference period. The rate that applies to a worker is the rate they are entitled to on the first day of the pay reference period.

For example, at age 20 a worker is entitled to the 18 to 20 years old rate. From the first pay reference period starting on or after their 21st birthday, they become entitled to the 21 to 24 years old rate. If you pay them for a pay reference period ending on a Friday and their birthday is on the following Wednesday – they will be entitled to the 21 to 24 years old rate from the Saturday after their birthday.

As the rates are age related, you may need to ask workers to provide proof of their age.

Rates for agricultural workers

As of 6 April 2016, rates for agricultural workers are:

  • Grade 1 – Minimum Rate, applicable for the first 40 weeks of cumulative employment – £6.76 per hour
  • Grade 2 – Standard worker – £7.05 per hour
  • Grade 3 – Lead worker – £7.74 per hour
  • Grade 4 – Craft Grade – £8.31 per hour
  • Grade 5 – Supervisory Grade – £8.80 per hour
  • Grade 6 – Farm Management Grade – £9.53 per hour

Where at any time the National Minimum Wage becomes higher than the hourly rate set out above, the minimum rate will become equal with the National Minimum Wage.