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UK Employment Increases April 2023 - Minimum Wage and other changes

From April 2023, there are a number of changes to statutory payments in the UK. In particular, we would encourage employers to check they are paying staff the correct minimum wage entitlement.
Here's our round-up of some of the main changes employers need to know:

1. Hourly rates

Employees aged 23 and over will typically be entitled to be paid at least £10.42 per hour, up from £9.50 in the current financial year. There's also increase of £1 per hour, to £10.18, for those aged 21-22, while 18-20 year olds can expect to receive at least £7.49 and 16-18 year olds should be on no less than £5.28 per hour. Apprentices will continue to be subject to a lower starting salary, which will be lifted to £4.81, although those aged 19 or over should be paid the usual rate for their age once they have completed the first year of their apprenticeship.

2. Family Leave

The flat weekly rate of statutory maternity will also see a jump from £156.66 to £172.48 per week. This rate also applies to other types of paid parental leave including paternity, adoption, shared parental and parental bereavement pay. As an employer, you can usually reclaim 92% of employees’ Statutory Maternity, Paternity, Adoption, Parental Bereavement and Shared Parental Pay or 103% if your business qualifies for Small Employers’ Relief.

3. Sick Leave
A chart which compares the changes in amounts between 2022-3 and 2023-4 and showing the corresponding percentage changes for the personal tax threshold (0%), redundancy cap (12.6%), sick leave (10.1%), parental leave (10.1%) and living wage (9.7%).
Weekly Payment and Tax Changes 2023 with Percentages
Also from April 2023, the rate of statutory sick pay increases from £99.35 to £109.40 per week. With some exceptions, the first three days off sick are classed as 'waiting days' which means employees are not normally entitled to statutory sick pay until day 4. It's also worth remembering, the amount employees get for each day they are off sick depends on the number of days they work.

4. Redundancy

Those who have worked for their employer for at least two years, and are being made redundant. are entitled to payment based on their length of service, earnings and age. The government has also announced an increase to the cap of what is deemed “a week’s pay” for the purpose of redundancy payments. This was £571, and it will now increase to £643. This cap of £643 will also apply to the weekly pay used to calculate certain other awards such as those applied by Tribunals in unfair dismissal cases.
5. Tax thresholds

The typical personal allowance above which employees start to pay income tax is staying at £12570 per annum (£242 per week or £1,048 per month). However, there are a range of other threshold changes coming into force from the new tax year, and details of these can be found on the UK government website, here.

These changes represent increases in outlay for employers adding to the already higher cost base caused by inflation. Unfortunately, the majority of employees won't feel better off from these hikes, thanks to rising inflation and the freeze on personal tax allowance.

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