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National Minimum Wage: Protecting Your Business from Compliance Risks
Welcome to the 2025/2026 tax year! In the coming year, the UK is set for some notable changes regarding payroll legislation, covering areas from Employment Allowance to Sick Pay. Among these, one significant update we would like to cover is the increase in the National Minimum Wage (NMW).
For businesses, adhering to NMW regulations is straightforward when it comes to zero-hour employees—you can easily monitor their hourly rates. However, salaried staff are just as important, and their compliance can sometimes be overlooked.
Monitoring the hours worked by salaried employees each month is a critical yet often overlooked task. Overtime hours, for instance, must be factored into NMW calculations to ensure the average hourly rate remains compliant. In today’s fast-paced world, accurate record keeping can be challenging but implementing robust processes and conducting regular checks will ensure your business maintains compliance.
Another commonly overlooked aspect of NMW compliance is monitoring deductions from employees' gross and net pay. These deductions must be carefully managed to ensure they do not reduce the hourly rate below the National Minimum Wage. Key examples of deductions to watch out for include:
- Uniforms,
- Private vehicle use,
- DBS checks,
- Salary sacrifice schemes,
- And many more
Remember that HMRC can carry out inspections of employers at any time, including checks for NMW compliance. Breaching regulations could lead to fines, adding unneeded stress for your business.
Why dedicate your time and energy to the complexities of NMW compliance when a reliable solution is ready to support you? Contact Southern Payroll Solutions to see how we can help your business thrive.
Directors of a Hampshire based payroll bureau offering managed payroll services and ad-hoc consultancy. Niall and Rebecca have nearly two decades of payroll experience to draw upon, and are keen to…
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