This website uses cookies to ensure you get the best experience. Please read our policies for more information.

10 Chartered Accountants

News

Businesses get to grips with new employment costs
09 April 2019

Employers across the UK are starting April with a sudden increase in employment costs following a rise in workplace pension contributions and minimum wage costs.

The sharp increase in expenditure on staff couldn’t come at a worse time for business who are experiencing growing uncertainty over the UK and wider global economy.

Minimum contributions for workplace pensions have risen to eight per cent this month, with a minimum contribution of three per cent from employers.

The five per cent gap between and the minimum overall contributions must be made up by contributions from the employee. However, employers can increase their contribution to reduce the impact on employees, should they wish.

The minimum contribution only applies to employees earning £10,000 a year or more and percentage contributions are calculated using only the employee’s earnings between £6,136 and £50,000. This is an increase from 2018’s income threshold of £6,032 to £46,350.

Meanwhile, many employers will also see wage costs increase with the introduction of new statutory wage levels. As of 6 April 2019, employers must pay the following hourly rates for staff on the minimum or national living wage:

  • 25 and over (national living wage) – £8.21
  • 21 to 24 – £7.70
  • 18 to 20 – £6.15
  • Under 18 – £4.35
  • Apprentice – £3.90

In some cases, the increase in the statutory minimum wage could push up the additional amount that employers are required to pay towards workplace pensions, meaning that employers with a large number of minimum wage workers, will be hit harder.

Link: National Minimum Wage and National Living Wage rates & Workplace pensions

Other recent news

Wealthiest UK families save nearly £700 million a year in Inheritance Tax
10 July 2019

A new report has found that a significant proportion of…
Read more

Taxpayers’ bills delayed by payment on account errors
10 July 2019

The Association of Taxation Technicians (ATT) has revealed that problems…
Read more

SMEs unaware of £1 million annual investment allowance
10 July 2019

A new study has found that more than half (58…
Read more

Businesses encouraged to increase readiness for no-deal Brexit
10 July 2019

Businesses across the UK are being encouraged to increase their…
Read more

Value of UK SMEs reach £3 trillion
10 July 2019

New research has found that the total value of UK…
Read more

»

Case Studies