As of the 6th April 2026, several changes will impact employers in the UK, including adjustments to National Minimum Wage and Accommodation Offset. This helpful post details these changes below:
National Minimum Wage Increases
From April 2026 the new National Minimum Wage rates are as follows:
Under 18: £8.00 per hour gross
Aged 18 – 20: £10.85 per hour gross
Aged 21 and over: £12.71 per hour gross
These rates represent the minimum amount that must be paid for each hour worked. It’s important to ensure compliance with these rates to avoid any legal issues.
Tax and NI Contributions:
The Personal Allowance for income tax is remaining at £12,570 per annum, with the higher rate threshold staying at £50,270 per annum.
National Insurance Contributions (NIC) are also remaining at the current rates and thresholds:
Employers will continue to pay NICs at 15% on earnings above £5000 per annum.
Employees will pay NICs at 8% on earnings above £12,570 per annum and then at 2% on earnings above £50,270 per annum.
Accommodation Offset
The accommodation offset rate, which allows employers to provide accommodation to employees as part of their job role, will increase to £11.10 per day (£77.70 per week).
Considerations for Employers
Employers must ensure that when applying accommodation offset to their employee’s pay, their hourly rate does not fall below National Minimum Wage minus the accommodation offset rate for each day within that pay period.
Salary Sacrifice Pension Changes
From April 2029, there will be a limit of £2,000 on the amount of any salary sacrifice for pension contributions that will be exempt from NICs. If an employee sacrifices more than £2,000 of salary for pension contributions, both employer and employee National Insurance Contributions will be due on the excess.
Please note that as this change is not coming into effect until 2029, this will not impact your current costs.
If you wish to discuss the financial impact of these changes with us please do get in touch with our payroll team on 01737 816 320 who will be happy to help!