New National Minimum Wage From 1 October 2009

The National Minimum Wage has increased, again, from the beginning of this month.

New rates from that date are as follows;

• For workers aged 22 or over: £5.80 per hour
• For workers aged 18 - 21, inclusive: £4.83 per hour
• For workers aged under 18 (but above compulsory school age): £3.57 per hour

Almost all workers are entitled to NMW, but there are some groups who are not.

• Self employed people
• Apprentices under the age of 19
• Apprentices aged 19 years or over, but only for the first year of their apprenticeship
• Children who are still of compulsory school age.

So, if you're an employee, you should now be paid at least these hourly rates. As an employer, you need to be aware of the rates, to ensure you are keeping up with your legislative responsibilities.

National Minimum Wage For Directors

On 2 September 2008, we posted details of the new National Minimum Wage for employees.

One question we often get asked is; "How does this affect us as directors"?

Many are aware of recent speculation and debate as to the legality of paying ourselves, as directors, less than the NMW. This is relevant for many small business people who pay themselves a small salary only, with the balance being topped up by dividends.

This is perfectly legal, as long as the director concerned does not have a contract of cmployment. As soon as a contract of employment is signed, then the NMW must be applied.

Sounds simple, except that the decision to sign a contract will also have an impact on the director's eligibility for Working Tax Credit (WTC).

• If you are a director with no contract of employment, you will not qualify for WTC, unless your partner works the required number of hours each week.


• If you do have a contract of employment, and pay yourself at least NMW, for the hours you do work, then you should qualify for WTC.

National Minimum Wage Increases Next Month

From 1 October, the national minimum wage (NMW) hourly rates will be increased to the following rates:

• Adult rate (workers aged 22 and over) will increase to £5.73.


• Development rate for 18-21 year olds will increase to £4.77


• Development rate for 16-17 year olds will increase to £3.53

The rate for accomodation offset will increase to £4.46 per day (weekly maximum £31.22).

For more information about the changes, or for general advice, call the NMW Helpline on 08456 000 678, or visit http://www.berr.gov.uk/employment/pay/national-minimum-wage/index.html