Increase in The National Minimum Wage and Holiday Entitlement

Please see detailed below an overview of 2 significant changes occurring in September and October:

Changes to Personal Tax Allowance and Tax Band – Effective 7^th September 2008

To compensate for the 10% tax band that the Chancellor abolished in April the personal tax allowance has been increased from £5,435 to £6,035. This is an increase of £600 per year. The higher rate threshold is being reduced from £36,000 to £34,800.

The increase in personal allowance will only affect basic rate tax payers who will see an increase in their pay of approximately £2.30 per week. This increase is backdated to 6^th April 2008.

Anyone who was previously on a tax code of 543L will now be on a tax code of 603L.

Increase in the National Minimum Wage – Effective 1^st October 2008

With effect from the 1^st October the national minimum wage increases as detailed below:

Employees aged 22 and above increase from £5.52 per hour to £5.73 per hour.
Employees aged between 18 and 21 increase from £4.60 per hour to £4.77 per hour.
Employees aged 16 to 17 increases from £3.40 per hour to £3.53 per hour.

16 and 17 year old apprentices are exempt from the young workers rate of £3.53.

Pay Check will NOT be responsible for automatically updating any employee rates. If you require any changes to rates please send a confirmation email/fax detailing the employees, the revised rates and the effective date.

The minimum wage is calculated using employees gross pay. The following pay elements should be used in the calculation:

Bonus and commission payments for that pay period
Tips, gratuities and service charges which are paid through the payroll
Payments received as part of an incentive
Piecework

You cannot however use overtime payments in the calculation.

Thank you

Pay Check

September 2008 Download this page