Apprentice Wages Are Rising: What Employers Need to Know in 2024/25
From 1 April 2024, apprentices will receive a significant pay increase under the new National Minimum Wage (NMW) rates. Employers need to review their payroll, contracts, and budgeting to ensure compliance with the updated rates and avoid penalties from HMRC.
This is a major increase for businesses that employ apprentices, particularly in retail, construction, hospitality, and trades, where apprenticeship schemes are common.
New Apprentice Minimum Wage Rates from April 2024
| Current Rate (2023/24) | New Rate (2024/25) | Increase |
|---|---|---|
| £5.28 per hour | £6.40 per hour | £1.12 (+21.2%) |
This is a record-breaking 21.2% increase—one of the largest ever for apprentices.
Employers must update pay rates from 1 April 2024 to comply with the new laws.
Who Qualifies for the Apprentice Minimum Wage?
The apprentice minimum wage applies if:
People aged under 19 OR
The apprentice is 19+ but in their first year of an apprenticeship
After the first year, apprentices aged 19+ must be paid at least the National Minimum Wage for their age group.
| Age Group (after first year of apprenticeship) | New Minimum Wage (from April 2024) |
|---|---|
| 18-20 years | £8.60 per hour |
| 21+ years (National Living Wage) | £11.44 per hour |
Example:
If an apprentice turns 19 in their second year, they must be moved to the higher minimum wage rate for their age group.
What This Means for Employers
1. Increased Payroll Costs
- Businesses employing multiple apprentices will see a higher wage bill.
- Budgeting for apprenticeships must account for wage increases.
2. HR and Payroll Adjustments
- Employers must update payroll systems to reflect new wage rates.
- Ensure contracts reflect wage changes—this applies to both new and existing apprentices.
3. Compliance with National Minimum Wage Laws
- Failure to pay the correct wage can lead to:
HMRC audits and investigations
Fines of up to 200% of underpaid wages
Public naming and shaming by the government
4. Apprenticeship Levy Considerations
- Large employers paying over £3 million in annual payroll are subject to the Apprenticeship Levy (0.5% of payroll).
- Small employers who don’t pay the Levy may need to co-fund 5% of training costs.
Employers can reclaim training costs through the Apprenticeship Levy, but wages must still be covered separately.
How Employers Can Prepare for the April 2024 Changes
1. Review all apprenticeship contracts—ensure apprentices receive at least £6.40 per hour.
2. Adjust payroll systems so wage increases take effect from 1 April 2024.
3. Monitor when apprentices turn 19—those past their first year must be paid their age-related minimum wage.
4. Consider apprenticeship funding options, including government incentives and Apprenticeship Levy support.
5. Train HR and finance teams to ensure full compliance with the updated rules.
Final Thoughts: Preparing for the Apprentice Wage Increase
This 21.2% increase in apprentice wages is one of the most significant in years and will affect many UK businesses. Employers must ensure compliance while considering the financial impact and benefits of apprenticeships.
Need help managing payroll and compliance?
At Merranti Accounting, we specialise in payroll management, employment law compliance, and tax-efficient workforce planning.
Contact us today to ensure your business is fully prepared for the April 2024 wage increases.
