Increases to statutory rates in 2023

The new financial year is almost upon us.

Anticipation is in the air as we expect the announcement of the 2023 Spring Budget by the Chancellor of the Exchequer, Jeremy Hunt, in the next few weeks.

Remember this?

Unlike last year, the UK has a sense of stability and a few things are certain. We know who the Chancellor will be in a fortnight, and a few statutory rates will be increasing. In this blog, we unpack everything you need to know to stay up to date with minimal hassle.

Find out exactly which statutory rates will be increasing, when these changes will be happening and how you can best prepare for these changes.

Let’s go.

Disclaimer: The information in this article is current as at 6 March 2023, and has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related bodies corporate (Employment Hero). The views expressed in this article are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice. The Information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising either directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article. You should undertake your own research and to seek professional advice before making any decisions or relying on the information in this article.

Which rates will be updated in April?

The following statutory rates will increase between 1 to 6 April.

National Minimum Wage

The following rates will apply from 1 April 2023 onwards.

Category of worker         |             Hourly rate

Aged 23 and above (national living wage rate)     |     £10.42

Aged 21 to 22, inclusive    |     £10.18

Aged 18 to 20, inclusive    |     £7.49

Statutory Parental Bereavement Pay

This increased rate will apply from 2 April 2023.

This will be a weekly rate of £172.48 or 90% of the employee’s average weekly earnings, whichever is lower.

You can calculate an employee’s Statutory Parental Bereavement Pay using Basic PAYE tools or guidance on manual calculation.

Extra leave or pay Government guidance says that the business can offer more leave and pay but the business can only recover 2 weeks payment for each employee and for each death.

You should make sure your Parental Bereavement Leave and Statutory Parental Bereavement Pay policies are clear and easily accessible to staff.

If you are struggling to stay on top of all things policy management, Employment Hero’s self-serve system can help you keep track of who’s up to date and who might need a gentle nudge.

Statutory Maternity Pay

Statutory Maternity Pay for eligible employees can be paid for up to 39 weeks.

The payment is scheduled into two parts:

• A weekly rate for the first six weeks: this is 90% of the employee’s average weekly earnings.
• After which there is a weekly rate for the remaining weeks: this will increase to£172.48 or 90% of the employee’s average weekly earnings, whichever is lower.

These rates will apply from 2 April 2023.

Statutory Sick Pay (SSP)

The weekly Statutory Sick Pay will be increasing to £109.40 and applies to all employees.

If your employee has less than a full week’s worth of qualifying days, the SSP they get depends on the number of ‘qualifying days’ they work each week.

These rates will apply from 6 April 2023 onwards.

Will we see any other rate rises in 2023?

With the Spring budget expected to be announced in the next few weeks, and the new financial year starting from 6 April 2023 to 5 April 2024, we expect a number of changes to follow.

Stay up to date with the latest news with Employment Hero.

No. 11 Downing Street is the official residence of the Chancellor of Exchequer. Image Credit: Metro UK

How can Employment Hero’s payroll software help businesses manage rate rises?

Get support with compliance and stay on top of your policy management with Employment Hero’s HRIS software.

From reducing your admin time, to looking out for your team’s wellbeing and keeping them engaged, we can provide you with support across your HR and payroll needs.

Including the ability to simplify your payroll with our self-serve system so you can keep things running smoothly across your business. And if you’re thinking of growing? We’ve got the solution for you, too.

Book a demo with our friendly team to see how you can make the most of Employment Hero today.

Other useful resources:

• Employment Law Update Winter 2023
• Payroll Guide: The basics of payroll in United Kingdom