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What is this resource?

There has been a dramatic increase in the number of National Minimum Wage (“NMW”) reviews being undertaken as a result of greater HMRC focus and allocation of resource to the NMW team. This is linked to the Government’s wider “high pay, low tax” social agenda. The Department of Business, Energy and Industrial Strategy frequently “names and shames” employers found to be paying below the NMW threshold, which can have an impact on a business’ reputation. There is also a potential financial impact as the level of penalties is up to 200% of the underpayment.

Underpayments can arise even when employees are paid in excess of the headline rate (eg. because of the composition of pay or the way in which HR policies operate). It’s therefore essential for an employer to be aware of and manage the potential areas of risk in light of the NMW regulations.

Given the introduction of the National Living Wage (“NLW”) from April 2016 and the fact that this is expected to rise from £7.50 (April 2017 rate) to over £9.00 by 2020, more employers will need to consider the impact of their pay and operations and ensure that NLW/NMW are not breached.

National Minimum Wage

A resource to help you understand:

  • HMRC’s guidance on National Minimum Wage and National Living Wage rates


Use HMRC’s minimum wage calculator to check you’re getting paid the National Minimum Wage

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Need further information about this topic?

For further information, or to discuss, please contact John Harding or your usual PwC advisor.