Annual increases to the minimum wage, parental leave payments and other statutory payments are usually made in April each year, to coincide with the new tax year. We’ve rounded up these important updates to employment laws below, so you can make sure your business is on top of its obligations.
1 April 2023: National Living Wage and National Minimum Wage increase
On 1 April 2023, the National Living Wage (NLW) and National Minimum Wage (NMW) will increase as follows:
- NLW rate for 23+ year olds: £10.42 per hour
- NMW rate for 21-22 year olds: £10.18 per hour
- NMW rate for 18-20 year olds: £7.49 per hour
- NMW rate for 16-17 year olds: £5.28 per hour
- NMW rate for apprentices: £5.28 per hour
For guidance about which of your staff are entitled to the national minimum wage or the national living wage, see our Q&A on Staff pay.
2 April 2023: Statutory maternity, paternity, adoption, shared parental and parental bereavement pay rates increase
These rates are all increasing from £156.66 per week to £172.48 per week.
For further guidance about parental leave payments, see our Q&A on Pregnancy, maternity and adoption or Paternity and shared parental leave.
6 April 2023: Increase to statutory sick pay
From 6 April 2023, weekly statutory sick pay rates rise to £109.40, up from £99.35.
6 April 2023: Statutory redundancy pay cap increases
Employers that dismiss employees for redundancy are required to pay those with two years’ service an amount based on the employee’s weekly pay, age, and length of service.
The weekly pay amount that the redundancy payment is based on is capped, and is increasing from 6 April 2023 to £643 per week.
For guidance on calculating redundancy payments, see our Q&A on Redundancy process.
6 April 2023: Increase to compensation for unfair dismissal
Compensation in unfair dismissal claims is split into a ‘basic’ award and a ‘compensatory’ award. The compensatory award is designed to compensate an individual for their loss of earnings up to one year’s gross pay, which is subject to a cap.
From 6 April 2023, the cap for the compensatory award is increasing from £93,878 to £105,707.
For guidance about dealing with legal claims brought by staff, see our Q&A on Legal action by and against staff.
6 April 2023: Top income tax bracket reduced
From 6 April 2023, the threshold for the top rate of tax will be reduced for all UK taxpayers from £150,000 to £125,140.
The corporation tax rate for companies earning over £250,000 in profit will also increase to 25%.
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Marion joined Sparqa Legal as a Senior Legal Editor in 2018. She previously worked as a corporate/commercial lawyer for five years at one of New Zealand’s leading law firms, Kensington Swan (now Dentons Kensington Swan), and as an in-house legal consultant for a UK tech company. Marion regularly writes for Sparqa’s blog, contributing across its commercial, IP and health and safety law content.