The government has confirmed that the new rate will start on 1 April 2020 and will result in an increase of £930 annually for the 2.8 million full-time workers on the National Living Wage (NLW) which will rise for those over 25 from £8.21 to £8.72 per hour.
Younger workers who are paid the national minimum wage (NMW) will also see their pay increase by 6.5% from £7.70 to £8.20 for 21-24 year olds.
For workers aged 18 and below, there will be a 4.6% increase from £4.35 to £4.55 an hour and apprentices will also see their wage rise by 6.4% from £3.90 to £4.15.
The Chancellor also plans to expand the reach of the NLW to cover workers aged 23 and over from April 2021, and to those aged 21 and over within five years, this is expected to affect around four million low paid workers.
For business owners now is the time to start preparing for the changes as these rises will affect all PAYE workers from 1 April 2020 by making sure any timekeeping systems and wage sheets are updated in time.