New National Minimum and Living Wages 2025: Employer Guide
- JAFA Accountancy
- 4 days ago
- 3 min read
The UK’s new minimum and living wage rates take effect in April 2025, and if you run a small business or hire freelancers, staying compliant isn’t optional. This quick guide breaks down what’s changing, what you need to do, and how to keep payroll stress-free.
What are the UK's New National Minimum and National Living Wage Rates in 2025?
Starting 1 April 2025, the UK's minimum wage rates will increase. Here's a straightforward breakdown:
Category | Previous Rate (from 1 April 2024) | New Rate (from 1 April 2025) | Increase (£) | Increase (%) |
Aged 21 and over (National Living Wage) | £11.44 | £12.21 | £0.77 | 6.7% |
Aged 18 to 20 | £8.60 | £10.00 | £1.40 | 16.3% |
Under 18s and apprentices | £6.40 | £7.55 | £1.15 | 18% |
Note that apprentices are entitled to the apprentice minimum wage if they’re under 19, or aged 19 or over and in the first year of their apprenticeship. After the first year, those aged 19+ must be paid the minimum wage for their age group.
Make sure your payroll systems are updated to reflect these changes to remain compliant and avoid potential penalties.
What Employers Need to Do
Starting 1 April 2025, the UK's National Minimum Wage (NMW) and National Living Wage (NLW) rates will increase. If you employ anyone, you’ll need to make a few changes to stay on the right side of the law and avoid any payroll headaches.
Here’s what to do:
Update Your Payroll
Check pay rates: Make sure every employee is earning at least the new rate for their age.
Adjust your system: Update your payroll software (or let your accountant know) so it pays the right amount from April.
Talk to Your Staff
Tell your employees about the pay rise and when it kicks in. Some of your employees might ask about their payslip or rate changes, so you should have a simple explanation ready.
Check Your Budget
Think about how the new rates will affect your monthly payroll. If needed, find ways to save in other areas or increase revenue to balance things out.
Stay Compliant
Keep records: Make sure you’re tracking hours worked and pay correctly - just in case HMRC ever checks.
Check birthdays: If someone turns 18, 21, etc., during the year, they might move up to a higher wage rate.
Pay apprentices correctly: Remember, apprentices have different rules, especially if they’re over 19 and in their second year.
What We Think
The new rates are good news for employees, but they also mean more costs for employers. If you run a small business or hire younger staff or apprentices, the increases might feel like a big jump, especially if you're already working with a tight budget.
In our experience, most business owners want to do the right thing. But with everything else on your plate, it’s easy to miss a wage update or forget when someone moves into a higher age bracket.
We believe it’s not just about avoiding fines - it’s about staying on top of your payroll, avoiding mistakes, and keeping things running smoothly.
How JAFA Can Help
We make it easier to stay compliant without adding to your workload. Our professional team helps you keep track of payroll changes, makes sure your staff are being paid correctly, and helps you avoid mistakes that could lead to fines.
We also give you clear financial reports and cash flow insights, so you can see how wage increases affect your bottom line and plan ahead with confidence.
With JAFA, you get both expert support and simple tools to keep payroll stress-free, so you can focus on running your business.
Contact our expert accountants based in Birmingham, UK, either by booking a FREE discovery call or calling us on +44 121 227 6277.
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