National Living Wage update: 21st January 2025
The National living wage is due to rise to £12.21 from 1st April 2025.
The latest forecast/update coincides with the recent Autumn Budget.
With most schemes we use a 'projected NLW rate' this is to mitigate the risks of employees falling below the NLW in any given year. We will continue to use projections for predicting future rate increases, we understand that this is just a forecast but we have a legal obligation to ensure that no staff falls below the proposed new minimum rates on its implementation.
Net Deduction cars are not available through Fleet Solutions, this is due to recent communications (HMRC Webinar) provided by our payroll provider that HMRC may require the Employer to use the National living wage rates against a NET car application.
From 30th October 2024 the Trust will use a 'projected' rate of £12.21 for 12 month applications and £12.96 for 18/24 month applications. This is applicable for Home Electronics, Liaison Tech, Hays and Bike applications.
From 21st January 2025 the Trust will use the following rates for Fleet Solutions/GMP (Car) - £13.71 for 24 month and £14.46 for 36 month applications. This is because cars have an order lead-time (Delivery date)
Please see below for some examples and a full list of rates for each scheme.
Salary Sacrifice Scheme NLW rates effective from 30th October 2024, please see list below:
Home Electronics - 12 month applications - £12.21 per hour/24 month applications - £12.96 per hour.
Full time Threshold £23,874.90 (Over 12 Month) and £25,341.42 (Over 24 Month); An employee cannot FALL below these amounts when applying through Home Electronics. *Please note the Threshold is calculated pro -rata. Ask the Salary Sacrifice team for further advice.
Fleet Solutions/GMP - 24 month applications - £13.71 per hour/36 month applications - £14.46 per hour.
For cars - Full time Threshold £26,808.00 (Over 24 Month) and £28,274.50 (Over 36 Month); An employee cannot FALL below these amounts when applying through Fleet Solutions/GMP. *Please note the Threshold is calculated pro-rata. Ask the Salary Sacrifice team for further advice.
If an employee has a NET car, please be aware the Trust will use the monthly/yearly 'Net' deduction against any future Salary Sacrifice applications and this could affect future applications.
Cycle to work - 12 month applications - £12.21 per hour /18 month applications - £12.96 per hour.
Mersey travel pass - 12 month applications - £11.44 per hour - Full time Threshold £22,369.28
Additional annual leave - Any application in the current fiscal year April 24 to November 24 - We use the current NLW rate - £11.44 - Full time Threshold £22,369.28
As part of the Salary Sacrifice schemes’ terms and conditions of operation, set by HMRC, the Trust uses the NLW level as a starting point when setting the ‘Minimum Entry Level’ for new Salary Sacrifice applications.
Our ‘Minimum Entry Level’ has been set slightly higher than the NLW in anticipation of any future increase in NLW during the term of the item, ensuring the Trust is compliant with the HMRC regulations. It also avoids any ‘knock on’ effect to participating staff’s tax coding or their ability to continue with the item as a Salary Sacrifice.
We will carry out a National Living Wage audit in preparation for the next rate rise (£12.21) due 1st April 2025. We will look to email any employee that has any salary sacrifice deductions and has been identified that they fall below the new rate. In the email, we will explain this in more detail with actions that we are required to make, including potential 'pausing' deductions. This will be reviewed and any 'paused' deductions will be re-instated and completed as per contractual obligations once the NHS receive any pay awards for 2025.
Please look for any relevant updates on the Staff Hub/FAQs or through the Liverpool News 'communication' emails.
If you have any queries relating to this memo, please contact the Salary Sacrifice Team by email: smartsalary@liverpoolFT.nhs.uk or contact HMRC direct for tax queries.