Here’s a quick rundown of the employment changes coming around next month that you need to know about.
National Minimum Wage and National Living Wage Rate Changes
The national minimum wage rises in April 2017:
- For workers aged at least 21 but under 25 – from £6.95 to £7.05 per hour.
- For workers aged at least 18 but under 21 – from £5.55 to £5.60 per hour.
- For workers aged 16 or 17 rises from £4 to £4.05 per hour.
- Apprentice rate from £3.40 to £3.50 per hour.
- The national living wage, the rate for workers who are aged 25 and over, will rise from £7.20 to £7.50.
Changes to Income Tax and Thresholds
- The personal tax allowance increases to £11,500, and increases the higher rate tax threshold to £45,000.
- The lower earnings limit for primary Class 1 national insurance contributions increases for 2017/18 to £113 per week.
Statutory Payment Increases
- The rate of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay increases from £139.58 per week to £140.98 per week.
- The standard rate of statutory sick pay increases from £88.45 per week to £89.35 per week.
Pension – Auto Enrolment
- The earnings threshold for pension’s auto-enrolment are frozen for the tax year 2017/18.
- The lower level of qualifying earnings is frozen at £5,876 and the upper level of qualifying earnings is frozen at £45,000.
- The earnings trigger for auto-enrolment remains unchanged at £10,000.
Salary Sacrifice Schemes
- Benefits offerings as tax savings through salary-sacrifice schemes will be abolished from 6 April 2017.
- Schemes related to pension savings (including pension’s advice), childcare, cycle-to-work and ultra-low emission cars will not be affected.
- Schemes in place prior to April 2017 will be protected until April 2018.
- An apprenticeship levy will be imposed on all large employers in all industry sectors. Employers will have to pay 0.5% of their wage bill (total employee earnings), but will receive an allowance of £15,000 to offset against the payment of the levy, which means that only those employers with pay bills of more than £3 million will be affected.