What’s Changing this April 2025?
New pay rules come into effect this month, and by now, you should be ready. The key updates include increases to the National Minimum Wage (NMW), Statutory Sick Pay (SSP), and Family-Friendly Payments. Here’s a simple breakdown of what’s changing and what you need to do.
National Minimum Wage Increased
The increase in National Minimum Wage took effect on 1stApril. If you have employees on minimum wage, you should have already updated their pay. The new rates are:
- For age 21 and over will Increase from £11.44 to £12.21 per hour
- For 18–20-year-olds will increase from £8.60 to £10 per hour
- For 16–17-year-olds/apprentices will both increase from £6.40 to £7.55 per hour
Make sure your payroll system is updated so that no one gets underpaid. Paying less than the legal rate could result in fines and damage to your business’s reputation.
Sick Pay (SSP) is Increasing
If an employee is off sick for four or more days in a row, they may qualify for Statutory Sick Pay. From 6thApril, Statutory Sick Pay (SSP) will increase from £116.75 to £118.75 per week.
The Lower Earnings Limit will increase from £123 to £125 per week.
Double-check your payroll system to make sure the correct amount is paid and take the opportunity to remind employees of your sickness reporting process.
Family-Related Pay is Also Rising
Statutory pay for maternity, paternity, adoption, and shared parental leave is increasing. From 6thApril, Statutory Maternity Pay (SMP) and other family leave payments. including Statutory Paternity Pay, etc. will increase to £187.18 per week.
Employees still need to meet eligibility criteria, like having worked for you long enough and earning over a certain amount. Make sure you are familiar with the changes and update payroll accordingly.
What You Should Have Done By Now
To avoid penalties and ensure a smooth transition, here’s what small business should have done by now
- Budget for Increased Costs - Ensure you have factored in all the relevant increases that affect your business into your financial plan to avoid unexpected costs.
- Confirm changes in writing - If any employees are directly affected by the new rates (e.g. a rise in the National Minimum Wage or employees on long-term sick leave) it’s best practice to confirm the change in writing. This helps to avoid confusion, keeps your records up to date and shows good communication and transparency.
- Train Your Managers - Ensure your Managers are aware of the changes and the impact on costs in your business. Provide training or guidance to avoid misinterpretations that could lead to compliance issues.
- Ensure Payroll Compliance - Check with your payroll provider or accountant to confirm that the new rates are being applied through your payroll system has been updated