What is the UK London Living Wage?

The London Living Wage is an hourly rate of pay that has been calculated for workers in London that should allow workers to provide for their families, pay for essentials and save.
The rate is currently £13.85 an hour

This is significantly different from the UK Living Wage, which currently is £12.21 an hour.
Unlike the National Minimum wage, the Living Wage, and the London Living Wage rates of pay are not mandatory and is at the discretion of the employer.

What is the London Living Wage as an annual salary?

The London Living Wage is set at £13.85 per hour, reflecting the higher cost of living in the capital. Like the UK Living Wage, it is calculated on an hourly basis rather than as a fixed annual salary. You can estimate an annual salary by multiplying the hourly rate by the number of hours worked per week and then by 52 weeks.

For example, if an employee works 37.5 hours per week, the London Living Wage as an annual salary would be calculated as £13.85 × 37.5 × 52 = £27,007.50. In comparison, the UK Living Wage outside London is £12.60 × 37.5 × 52 = £24,570.

When using a salary calculation, accredited employers must also ensure that all overtime hours are paid at least the Living Wage rate to remain compliant.

Are there benefits to the employer?

Why would an employer choose to pay above the National Minimum Wage, and opt for the London Living Wage? Employers who choose to pay the Living Wage above the National Minimum Wage often see several advantages, including:

• see reduced absenteeism and sick leave
• find it easier to recruit and retain staff
• see a huge boost to staff morale and productivity
• see improved brand awareness as an ethical employer
  
  

What are the benefits to the employee?

Employees receiving the London Living Wage can enjoy:

• Employees are able to afford the things they need to live (a decent meal, warm home and the odd treat)
• Feeling valued by their employer
• Improved job satisfaction
• More willing to implement changes in the workplace

Conclusion

Choosing to pay the London Living Wage demonstrates a commitment to supporting your workforce in line with national living wage rates while reflecting the unique cost of living in London. It benefits both employees and employers, improving staff retention, satisfaction, and overall productivity.

Contact the payroll team by completing the form on our website. Alternatively you can call us on 020 8977 3559 at our Hampton Wick office to speak to an adviser.

For more information on the London Living Wage, take a look at the Living wage website, and see the benefits to your business and your employees http://www.livingwage.org.uk/what-living-wage