Are you ready for the Living Wage?

From 1 April 2016, there’ll be a new Living Wage for workers aged over 25. The rate will be £7.20 per hour, replacing the current Minimum Wage of £6.70 – that’s an increase of 7.5%.

I was chatting to one of my clients recently and this impacts over half of their current staff directly as they’re over 25 and currently earning less than the new Living Wage. Therefore, they’ll get an immediate pay rise.

However, the implications are even wider than that. It’s likely they’ll have to increase the wages of the other staff as it will put some of their rates out of sync with their experience.

As an example, you might have a 23-year old who’s been with you for years, knows the business inside out and is paid £7.10 per hour, while a 25-year old who’s new to the business is currently paid £6.70. When the 25-year old gets a statutory pay rise to £7.20 per hour, will the 23-year old superstar still be happy on £7.10? Or will you need to give them a pay rise too?

So, are you aware of the changes……and have you budgeted for them?

If you found this useful, please share it using the icons at the top and bottom of the page, or leave a comment below.

Any questions?

If you’d like a meeting or a Skype call with a Liverpool accountant to discuss this, please give us a ring on 0151 380 3800 or drop us an email at [email protected].

Subscribe to get our best tax and business tips sent directly to you

* indicates required

Added by Jon Davies
If you like it, please share it!