Accounting News

Minimum Wage Increase... Are you ready?

Employers should be aware of National Living Wage & Minimum Wage increases

Monday 9 March, 2020

Increased National Living Wage and National Minimum Wage rates come into force in April 2020. Below are details of the current and new rates for different age groups.


25 and over 

21 to 24

18 to 20 

under 18 


April 2019






April 2020






*Apprentices are entitled to the apprentice rate if they are either:

  • aged under 19
  • aged 19 or over and in the first year of their apprenticeship

Some local businesses may have to pay higher salaries to young people

Many of our Visionary clients employ young people and are based in St Albans, Welwyn Garden City and Watford. We are making them aware of the increases to the National Living Wage and National Minimum wage that take effect from April 2020.  

The table above shows that anyone over the age of 25 receives the National Living Wage which will increase by 6.2% from its 2019 level. This is good news for young employees as their wage is going up faster than inflation. Similarly, for anyone aged 21-24 years old who receives the National Minimum Wage their rate of pay will increase by 6.5% from its 2019 level.

How will the wage increase affect your business costs?

Taking the 25 and over category and assuming a young person worked a 40-hour week, a local business would have to pay £348.80 p/w to anyone who is 25-years or older after April 2020, compared to £328.40 p/w now. If we assume these employees work for 52 weeks a year, they would earn £18,137.60 in the year after April 2020, compared to £17,076.80 in the current tax year. This is an increased cost to the business of £1,060.80 per employee. In addition, employers will incur an increased cost in Employers NIC and workplace pension contributions.

How will Welwyn Garden City employers be affected by the increase in the National Living wage and the National Minimum Wage?

Many local businesses, for example in Welwyn Garden City, Watford and St Albans, will see their wage bill increase because they employ young people or adults on the National Living wage. Young adults work in a variety of industries, but many businesses that typically employ younger people include hospitality, services, retail, leisure and wholesale.  

Welwyn Garden City in Hertfordshire has many businesses where young people are employed

If we consider Welwyn Garden City as an example, there are several hotels where young people will be employed. Similarly, many young people work in Welwyn’s retail parks sports centres and shopping centres. 

How should local businesses prepare for the increase to the National Living wage and National Minimum wage?

Tena Wallace, HR & Payroll Director, Visionary Accountants, St Albans said: 

‘Firstly, it is essential that every business takes note of the changes due in April and reviews their workers' pay rates where applicable. You will also have to make changes to your payroll systems before April’s change to the National Living Wage and National Minimum Wage. Visionary Accountants work with businesses in Hertfordshire, London and the surrounding area managing the payroll for many small and medium sized businesses who do not have the time or the trained staff to do it in-house. We have many local clients in Welwyn Garden City, St Albans and Watford and we are working with them to prepare them for these changes.  It can be expensive to run your own payroll in-house so if you would like to consider a more cost-effective option call a member of our accountancy team on 01727 730550 for a free initial consultation.’

Tena Wallace, HR & Payroll Director, Visionary Accountants, St Albans continued: 

‘We would also recommend that any business that employs a considerable number of young adults reviews the cost to their business as our example shows that even if you only employ 10 adults over the age of 25 years old it will cost you more than £10,000 a year extra to employ them in your business after April 2020. This will affect your profitability, so you should prepare your finances accordingly. At Visionary Accountants our qualified accountants work with local businesses to help them with their strategic planning, so they budget for increased costs well ahead of time. If you are interested in changing accountant and want to get more information about how we can help your business achieve its growth targets, please call our sales team on 01727 730550 for a no obligation quotation.’

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