Did you know that the minimum increased from April 2025?
Any increase in wages can have a significant impact on your payroll costs, cashflow and the profitability of your business. So, being aware of the minimum wage is a must.
What are the main changes to the minimum wage?
The Government has recently announced a rise in the minimum wage, to bring wages more in line with living standards and rising costs.
From 1 April 2025:
- The adult minimum wage will go up from $23.15 to $23.50 per hour.
- The starting-out and training minimum wage will go up from $18.52 to $18.80 per hour.
- All rates are before tax and lawful deductions, e.g. PAYE tax, student loan repayment, child support.
How can you minimise the impact of this rise to wage costs?
Paying out more in labour costs will ultimately have an impact on your bottom line.
Paying your workers more will eat into your profits, so it’s important to be cautious. Plus, you’ve got to make sure you’re following all the legal rules when it comes to wages.
So, how can you ease the impact of these higher costs and keep things running smoothly?
Review your pricing
Recalculate your prices to reflect the increased wage expenses. You need to stay competitive, while increasing your margins enough to cover the wage increase.
Analyse your labour costs
Take a look at how many staff you actually need to keep things running smoothly. See if there are ways to simplify tasks or use technology to handle some jobs, so the higher wages don’t hurt your profits as much.
Update your payroll budget forecasts
Update your payroll budget to include the new wage expenses and cut back on other costs as needed. This way, you can balance the extra labor expenses while keeping your cash flow positive.
Communicate the change with your employees
Let your team know how you’re handling the wage increase and any changes coming their way. Be open about it, and update all the payroll rates in your system before April.
Talk to your business adviser
Professional advice helps you to explore different strategies for managing these increased wage costs. You can also look out for opportunities to claim tax benefits or government grants.
Helping you get your wages under control
Come and talk to us if you’re affected by the minimum wage rate increase. We’ll help you update your payroll and look for ways to reduce and mitigate the impact.
