NMW and NLW update

Employer actions required from 1 April 2025

✅ What You Need To Do Now

1. Update Payroll Systems
Check that all employees are being paid at least the new legal minimum. This includes part-time, zero-hours and casual workers.

  • If you pay by salary, check their hourly rate still meets the legal minimum.

  • Make sure your payroll software is updated, or do manual checks if needed.

2. Communicate with Staff
If any employees are getting a pay rise to meet the new rates, let them know. A short email or letter is usually enough. It’s good practice and helps build trust.

3. Review Young Workers and Apprentices
Make sure you’re paying the correct rate for 16–20 year olds and apprentices.

  • Apprentices aged 19+ who’ve completed their first year must now move onto the age-appropriate minimum wage.

4. Update Employment Documents
If pay is mentioned in contracts or offer letters, check if updates are needed.

  • A simple written confirmation of the new pay rate from 1 April is usually fine.

5. Plan for the Cost
These increases can affect your overall wage bill – including pension contributions, holiday pay and NICs.

  • Review your cash flow and budgets to stay on track.

Please also see:  https://www.gov.uk/national-minimum-wage-rates

⚠️ Why It Matters

Paying below the minimum wage – even by mistake – can lead to serious consequences, including:

  • Paying up to 6 years’ back pay

  • Fines of up to 200% of the amount owed

  • Being publicly named and shamed by HMRC

Common pitfalls include:

  • Not paying for time spent putting on uniforms

  • Wrongly deducting costs (e.g. for tools or training)

  • Averaging pay incorrectly over hours worked

📝 Summary Checklist

  • Update staff pay rates by 1 April 2025

  • Make sure everyone is paid correctly based on age and role

  • Communicate changes to staff

  • Update contracts or send a confirmation letter if needed

  • Review your payroll, budget and cash flow to stay prepared

Need support?
We’re here to help you stay compliant and confident.
📞 Get in touch with the team at An Accounting Gem today.

Please see another An Accounting Gem blog:  https://www.aag-accountants.co.uk/setting-the-2025-26-salary/

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