National Living Wage and National Minimum Wage
The rates for both the national living wage and national wage will increase from 1st April 2027, with an overall increase across all age ranges of 3.9%. However, the Government has not addressed the pay gaps between age groups as all groups have been increase at the same rate.
The new rates are as follows:
National Living Wages (21 & over) – £13.21
18-20 Year Old Rate – £11.27
16-17 Year Old Rate – £8.31
Apprentice Rate – £8.31
Employers will need to be careful when applying the new rates, as the secondary threshold has remained at £5,000 (meaning any additional wages will be subject to employers NIC) and the employment allowance has remained at £10,500. For any business that is already making use of the full employment allowance this means that the wages increases will also come with increased employers NIC liabilities, as well an increase in employer pension contributions.
Payrolling of Benefits in Kind
It was previously announced that will be come mandatory to include benefits in kind on the payroll, as well as paying the association income tax and class 1a NIC. It has become confirmed that it will occur in two stages, with the first coming into force from 6th April 2026 and will including company cars and vans, fuel benefits and medical benefits. Most other benefits will need to be included from 6th April 2028.
