The minimum wage rates usually change each April (at the start of the new tax year) so it is important to make sure you are using the correct rate for the tax year you are processing.

There have been significant increases made to the rate in the last few budgets as all employers should be aware.

Paying your employees below the minimum wage (which is now the same as the national living wage) is not legal and you can be made to pay back pay if you are caught out.  There have been some high profile cases where large companies have not quite administered it correctly.

If you are making deductions from your employees, this is where you can easily make mistakes.  Deducting half an hour from an employee who is late for work, can end up meaning that employee does not then get paid the correct minimum wage for the hours they did work. 

It is important that if you make a deduction, you know that :

their worked hours x the minimum wage rate = their gross wages for the shift

Making deductions for food/drink or uniform etc provided must also be done very carefully, as the employee must still always be left with the minimum wage rate.  If you ask for money back from the employee for food/drink, this puts the employee in control of their spending.  If you deduct it from their pay in their payslips, you remove their control and therefore it forms part of the minimum wage calculations.

Holiday pay is another tricky area, especially with employees on zero hour contracts.  There are new rules in place now which allow you to calculate a monthly holiday allowance to pay alongside worked hours each month.  This is easier to administer than the old method but your employee needs to understand that this method means they will not receive an additional amount for holiday when they take leave.