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National Minimum Wage and National Living Wage

The NMW (National Minimum Wage) was first introduced in April 1999, at a headline rate of £3.60.

From April 2016 the NLW (National Living Wage) replaced NMWfor adults over 25.

In most cases NMW/NLW is tested against an employees gross pay, but there are special rules around deductions for things like employer provided accommodation, and special rules to calculate working time where there are elements of being on standby, travelling to assignments or similar.

NMW/NLW is enforced by HMRC.

Two common questions:

  • Do Directors need to pay themselves NMW/NLW?  No, they don’t unless they have a contract of employment with the company – unlikely.
  • Do family members working in the business qualify for NMW/NLW?  No, so long as they live in the same household as the business owner(s).


Current NMW/NLW rates:

 

Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice
April 2020 (current rate) £8.72 £8.20 £6.45 £4.55 £4.15
April 2019 to March 2020 £8.21 £7.70 £6.15 £4.35 £3.90