The cost of living crisis is hitting hard. Utilities, food and drink, transport… it’s all going up. It’s costing people more and more to do the things they have to do to live. In response, the Goverment announced a notable increase to the National Minimum Wage in the UK which comes into force in April 2024.
So, what is the increase? And how will it affect your business?
Let’s start with a simple calculator designed for small businesses.
Cost of National Minimum Wage Increase Calculator
If you just want to simple answer to “how much more will it cost my business?” this is for you. Simply enter the number of employees you have on National Minimum Wage at each group and the average number of hours they work. You can do this for all your employees of course or just look at specific ones (e.g. full time over 21s). Enter whatever data you want the calculation based on and the calculator will tell you the increased wage cost.
One thing to bear in mind here not reflected in this calculator is the fact that as of now, the National Minimum wage is lower for those aged 21 and 22. The highest level only kicks in at 23. From April 2024, the highest level will apply from the age of 21.
What is the New National Minimum Wage?
Here’s a summary:
Age group | 2022/23 | From April 2024 |
23 and over* | £10.42 | £11.44 |
21 and 22* | £10.18 | £11.44 |
18 to 20 | £7.49 | £8.60 |
Under 18 | £5.28 | £6.40 |
Note, there is no longer a 21 and 22 age group and the highest level of the National Minimum Wage applies to all those aged 21 and over from April 2024.
This is, according to Government, “the largest ever cash increase to the National Minimum Wage.”
This was announced by Jeremy Hunt in his Autumn Statement in November 2023.
How Much Will It Cost Small Businesses?
Let’s say you run a restaurant with 4 employees over 21 all working 30 hours per week.
It will cost you £1,372.80 per week in wages from April 2024. This is up from £1,240.50 – an increase of £132.30 per week (or £6,879.60 each year).
If you own a business employing 12 minimum wage staff working 37 hours per week, each of them will earn an additional £37.74 per week. So your weekly cost increase is £754.80 in wages alone – amounting to £9,057.60 per year.
And I think we can all agree that that’s amazing for employees and some real help for the lowest paid earners in the country is long overdue.
But on the other side of this celebrated win for employees are the employers whose costs about to increase significantly. While huge retailers employing staff on minimum wage might not be overly concerned, small owner managed businesses in hospitality and retail could be incredibly significantly impacted.
What’s your view?
If you’re a UK small business owner who has staff on minimum wage, get in touch and share your opinions. Any we publish here will be credited.