National Minimum Wage: rates and rights

Paying £12.75 an hour is no defence if a £12 uniform charge brings a worker below the £12.71 legal floor. The test is what a worker earns after qualifying deductions. A five-person business faces the same rules as a national chain.

The rates in force now

There are two names for the statutory floor: the National Living Wage (NLW) for workers aged 21 and over who are not on the qualifying apprentice rate, and the National Minimum Wage (NMW) for younger workers and qualifying apprentices. Neither is optional. Use the published rates and historical bands to check today’s payroll and past underpayments.

At 37.5 hours a week for 52 weeks, the NLW comes to £24,784.50 a year in wages before employer National Insurance and pension costs (1,950 hours × £12.71). At the 2025-26 rate of £12.21 it was £23,809.50. That is a £975 increase for the same hours. For arrears, use the band in force when the work was done. The 2025-26 bands were £12.21 / £10.00 / £7.55 / £7.55; in 2024-25 they were £11.44 / £8.60 / £6.40 / £6.40, in table order.

Who gets which rate

Employees and other workers qualify, whether full-time, part-time, casual, on zero-hours contracts or on probation. Piece workers, homeworkers and commission-only workers also qualify. Agency workers qualify too; the employment business normally pays them. A business’s size, turnover or start-up status makes no difference.

Genuinely self-employed people, volunteers receiving expenses only, directors without a worker contract, prisoners, the armed forces and children below school-leaving age are outside the scheme. A family member living in the employer’s home can also be exempt. An intern doing work as a worker must be paid. A student placement of up to one year forming part of a UK course, or genuine work-shadowing, may be exempt. Check the working arrangement rather than relying on the contract’s label. See GOV.UK’s eligibility rules.

Apprentices

The £8.00 apprentice rate applies to apprentices under 19, and to those aged 19 or over in the first year of their current apprenticeship. After that year, apprentices aged 19 or over move to their age band from the next pay reference period. At 21, an apprentice working 40 hours a week moves from £320 at £8.00 to £508.40 at £12.71, a rise of £188.40 a week. Record the anniversary alongside the next period’s start date. Northern Ireland’s Higher Level Apprenticeships do not use the apprentice rate; check the applicable age band.

Live-in domestic workers

A non-family live-in domestic worker, such as an au pair or housekeeper, may be entitled to minimum wage. The former exemption for non-family workers treated as members of the household ended on 1 April 2024; the narrow exemption for family members living in the home remains. Living in is not, by itself, an exemption.

How pay is checked

The pay reference period is the period a payment covers, up to one calendar month. Minimum wage is tested over each period. Divide qualifying pay by the working hours that count. For time work, a low-paid hour can be balanced by higher basic pay in the same period. A later month’s surplus cannot erase an earlier shortfall. GOV.UK explains the calculation.

Use the rate in force on the first day of the period. If a weekly period runs from 30 March to 5 April, the 1 April uprating first applies to the following week, starting 6 April. A worker’s 18th or 21st birthday, or an apprentice’s first-year anniversary, also raises the applicable rate from the next period. Acas sets out the entitlement rules.

1. Find the period and band. Check its start date, the worker’s age and apprenticeship stage.
2. Find qualifying pay. Start with gross pay, including qualifying commission and bonuses; exclude tips, ineligible premiums and amounts sacrificed for benefits.
3. Adjust for costs and accommodation. Take off employment-related charges and apply the daily accommodation rule.
4. Count the right hours. Divide by hours that count under the relevant type of work, then compare with the band rate. Salaried-hours work uses annual basic hours and has additional hours rules; output work paid by the piece and unmeasured work have their own hours rules. Do not assume the contracted hours equal the hours that count.

What counts as pay and which costs reduce it

Do not stop at the rate on the contract. Commission and performance bonuses generally count, but allocation between pay periods can matter, particularly for annual bonuses. Tips, gratuities and service charges do not count even if processed through payroll. Neither do loans, advances, expense reimbursements, redundancy pay or benefits in kind other than the accommodation adjustment. For time and output work, strip out the premium above basic pay for overtime or unsocial shifts. Do not exclude all the pay for those hours. The premium rule differs for salaried-hours and unmeasured work.

Required clothing, equipment, mandatory training and travel between work sites reduce qualifying pay if the worker bears the cost without reimbursement, even if they paid a third party after payday. Salary sacrifice can also push pay below the legal minimum. Income tax, National Insurance, pension contributions, union fees and repayment of genuine wage advances or accidental overpayments do not ordinarily reduce minimum-wage pay. A charge for breakages or till shortages under a contractual conduct clause can be treated differently from an employer’s general charge. Check the reason for the charge rather than relying on the payslip label.

Accommodation and the £11.10 offset

Accommodation provided by an employer is the sole benefit in kind with a minimum-wage offset. From 1 April 2026 it is £11.10 for each day accommodation is provided. Free accommodation adds that amount to minimum-wage pay; a charge at or below it leaves cash pay unchanged; a charge above it reduces qualifying pay by the excess. Payment after wages are received does not avoid the rule. Meals and other perks cannot be credited in the same way.

What happens if pay falls short

Arrears are not necessarily the original shortfall. If the minimum rate has risen, the law revalues the underpayment. The calculation is original shortfall ÷ historic band rate × today’s rate for that same band. For example, £1,000 underpaid to an 18-20-year-old in 2024-25, when the band was £8.60, becomes £1,000 ÷ £8.60 × £10.85 = £1,261.63. HMRC officers acting for the Fair Work Agency can issue a notice requiring arrears going back up to six years. A tribunal claim has different limits and recoverable periods.

A Notice of Underpayment can add a civil penalty equal to 200% of the underpayment, with a £100 minimum and a £20,000 maximum per worker. Paying all arrears and half the penalty within 14 days earns a 50% reduction in the penalty. Employers owing £500 or more in total arrears can be named publicly; the threshold is more than £100 for certain repeat or serious cases. Neither being a well-liked small business nor making an accidental error gives you a general exemption. Deliberately refusing to pay minimum wage can lead to prosecution. Obstructing enforcement or providing false documents can also be criminal offences. See the Fair Work Agency enforcement statement.

If you discover an error, repay the correctly uplifted arrears and fix the payroll cause promptly. The Agency’s policy says it does not ordinarily issue a Notice of Underpayment when all arrears have been paid before an investigation starts. Repayment after it starts will not usually prevent a notice, penalty or naming. Keep the pay records and your calculation. Workers are protected from being treated worse for asserting minimum-wage rights.

The “real Living Wage” is voluntary

The statutory NLW is £12.71 for workers aged 21 or over. The Living Wage Foundation’s 2025-26 real Living Wage is a separate, voluntary benchmark of £13.45 across the UK and £14.80 in London, for workers aged 18 and over. It was announced on 22 October 2025. Being in London does not oblige you to pay that benchmark. Accreditation is a voluntary commitment, not a substitute for the statutory band.

Scotland and Northern Ireland: farm wage rules

The statutory NMW and NLW bands apply across all four UK nations. Agricultural wage orders can set a higher floor for farm workers in Scotland and Northern Ireland; they do not remove the UK-wide minimum.

Under Scotland’s 2026 agricultural wages order, the minimum from 1 April is £12.71 for farm workers of any age, except qualifying agricultural apprentices on £8.00. An additional £1.91 an hour is due to eligible workers with specified agricultural qualifications or certificates. In Northern Ireland, 2026-27 agricultural grades set Grade 1 at the age-related UK minimum, Grade 2 at £13.30, Grade 3 at £13.66, Grade 4 at £13.89 and Grade 5 at £14.44. If a UK statutory band rises above a grade, the higher statutory rate prevails.

What is in force and what comes next

As at 1 October 2026, the April 2026 wage bands, the Fair Work Agency’s statutory remit and the six-month employment tribunal claim time limit are in force. The Scottish breach-of-employment-contract tribunal exception remains at its old limit until the scheduled 9 November change; this is distinct from an ordinary minimum-wage claim.

1. October 2026Next rates not yet announced

   The Low Pay Commission’s advice on 2027 rates is due by the end of October; no 2027 figure is law on this review date.

2. April 2027Next annual uprating expected

   The usual 1 April uprating is expected, but its figures await a government decision. Full transfer of minimum-wage enforcement staff from HMRC to the Fair Work Agency is planned from April. State enforcement of holiday pay is expected to begin during 2027; no exact start date is confirmed.