The National Minimum Wage Act 1998 provides the legal mandate for employers to pay a minimum wage.

The rates of national minimum wage applicable to pay reference periods starting on or after 1 October 2013 will be as follows:
• the main adult rate (for workers 21 and over) will increase by 12p to £6.31 an hour (currently £6.19 an hour)
• the rate for 18-20 year olds will increase by 5p to £5.03 an hour (currently £4.98)
• the rate for 16-17 year olds will increase by 4p to £3.72 an hour (currently £3.68)
• the rate for apprentices will increase by 3p to £2.68 an hour (currently £2.65).

From the same date, the accommodation offset will increase from the current £4.82 to £4.91.

A person qualifies for the national minimum wage if he is an individual who –

(a) is a worker;

(b )is working, or ordinarily works, in the United Kingdom under his contract; and

(c) has ceased to be of compulsory school age.

For a 37 hour per week worker the annual wage is £12,140.44 (£6.31*37*52)

The Living Wage Foundation use data from the Centre for Research in Social Policy at Loughborough University. They advocate the payment of a living wage of £8.55 in London and £7.45 elsewhere – that is £1.14 and £2.24 above the £6.31 NMW.

david@graceaccountants.co.uk