A good old pay rise isn’t always good news for everyone.


April is a time for good news and bad news.

For example, Easter.
Good news; lots of chocolate.
Bad news; sorting out childcare during the school holidays.

Well statutory payments are no different. Whilst we all enjoy a £650 increase in our personal allowance, there is also a rise in National Minimum Wage (NMW), National Living Wage (NLW) aswell as pension contributions.

This may be good news for those employed, but an employer of a labour intensive business could really feel the hit.

Employee’s AgeOld rateNew rate from 01/04/2019
Over 25 (NLW)£7.83£8.21


For NLW that is a rise of almost 5%!
The increase is, once again, above inflation. Likely to be down to the aim of increasing it to £8.75 by as early as next year.

The bad news doesn’t stop there unfortunately.

The minimum pension contribution is 5%. Usually the employers pay 2% (which is the minimum they must contribute) leaving 3% for the employees.
However, the minimum level of total contribution is rising to 8%. The minimum employer contribution is only rising 1% resulting in the employee being left with the 5% balance.

To summarise, wages are due to increase by almost 5% in some brackets which is a huge amount for many employers. Similarly, the increase in pension contributions is a hefty amount to take on for a lot of employees. Although, one thing not to be missed is that the employee’s contribution increase is virtually subsidised by the NLW and NMW increase.


If you have any questions about any of the above, or you would like help with your payroll, call the team now.

Talk to us today about accounting for tomorrow.