National Living Wage
As well as there being an increase applied, the Government has set out what is called its “ambitious plan” to have the National Living Wage at two thirds (66%) of the median earnings rather than 60% as now.
They also intend to extend the National Living Wage to workers aged 21 and over by 2024, and to have the rate at £10.50 an hour by the same date.
From April the threshold at which employees pay contributions will be £9,500, up from £8,632. This means a tax cut for 31 million workers and is £104 for a typical employee.
The Government’s long term stated aim is to increase the limit to £12,500.
At the same time there will be an increase to £4,000 from £3,000 for employer contributions, from April 2020. This will help 510,000 companies and will enable four full time employees on the National Living Wage to be employed without any National Insurance contributions.