National Minimum Wage and National Living Wage rates
The headline rate is the easy part. Almost every employer named by the Department for Business and Trade knew what the rate was — they got caught by unpaid minutes at the edges of a shift, or by a deduction nobody thought counted.
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Key takeaways
- From 1 April 2026 the National Living Wage for workers aged 21 and over is £12.71 an hour, with £10.85 for 18–20 year olds and £8.00 for under-18s and eligible apprentices
- Rates change on 1 April every year, so a rate that was compliant in March may not be in April
- Most underpayment is not a wrong headline rate — it is unpaid working time and deductions dragging effective pay below the minimum
- Accommodation is the only benefit in kind that counts towards minimum wage pay, at an offset of £11.10 a day — meals, travel and vouchers count for nothing
- Deductions for tax, National Insurance, pensions, loan repayments and the worker’s own conduct do not reduce minimum wage pay; deductions for uniforms, tools and PPE do
- Penalties run to 200% of arrears, capped at £20,000 per worker, and arrears are calculated at today’s rate rather than the rate that applied at the time
The rates from 1 April 2026
| Category | From 1 April 2026 | Previous (April 2025) |
|---|---|---|
| 21 and over (National Living Wage) | £12.71 | £12.21 |
| 18 to 20 | £10.85 | £10.00 |
| Under 18 | £8.00 | £7.55 |
| Apprentice | £8.00 | £7.55 |
| Accommodation offset (per day) | £11.10 | £10.66 |
Rates change on 1 April every year, and the new rate applies to pay reference periods beginning on or after that date. Where a monthly pay period straddles 1 April, the old rate applies for that whole period and the new one from the next — a detail that produces a lot of accidental underpayment in the first fortnight of April.
The apprentice rate has a time limit
£8.00 applies to an apprentice who is under 19, or 19 and over but in their first year. Once both of those stop being true, they move to the rate for their age. A 21-year-old apprentice who passes their first anniversary jumps from £8.00 to £12.71 — a 59% increase that has to be caught on the day, not at the next review.
Where underpayment actually comes from
Deductions and unpaid working time are the leading causes of underpayment in HMRC's enforcement data — not employers paying a rate they knew was too low. The pattern is almost always the same: a worker is paid the right rate for the hours on the rota, but the hours on the rota are not all the hours they worked.
Time that counts and has to be paid at least at the minimum wage includes:
- Waiting to pass through a security or bag check at the end of a shift
- A handover briefing between shifts
- Opening up before trading starts or cashing up after it ends
- Time a worker is required to be available at or near the workplace, whether or not there is work to do
- Travel between assignments or between clients during the working day
- Training, including travel to a training venue
Commuting between home and the usual workplace does not count, and nor do rest breaks, holidays or sick leave. The arithmetic is unforgiving: ten unpaid minutes a shift, across twenty shifts a month, is 3.3 hours — enough to pull someone paid exactly £12.71 below the minimum, every month, without anyone noticing.
Check your own numbers
Our free checker works out effective hourly pay once unpaid time, deductions and any accommodation charge are taken into account, and shows the arrears and penalty exposure if it falls short.
Open the minimum wage compliance checkerDeductions, uniforms and the accommodation offset
Minimum wage pay is measured on gross pay, so income tax and National Insurance do not reduce it. Beyond that, whether a deduction bites depends on what it is for — and the dividing line is not the intuitive one.
| Deduction | Reduces minimum wage pay? |
|---|---|
| Income tax and National Insurance | No |
| Pension contributions | No |
| Repaying a loan or an advance of wages | No |
| Recovering an earlier overpayment | No |
| Deductions for the worker's own conduct, where the contract makes them liable — a till shortfall, for example | No |
| Uniforms, tools, PPE and anything else bought because the job requires it | Yes |
| Anything the employer is simply free to keep and use as it wishes | Yes |
The conduct row is the one that surprises people: a deduction for a till shortfall the worker is contractually liable for does not reduce minimum wage pay, while a £30 deduction for a branded shirt does. Where a deduction is in the "yes" column, the worker's written agreement to it is not a defence.
Benefits in kind are separate again, and here the rule is blunt: accommodation is the only benefit in kind that counts towards minimum wage pay. Meals, travel, childcare vouchers and staff discounts count for nothing, however much they are worth to the worker.
| Accommodation charge | Effect on minimum wage pay |
|---|---|
| Provided free | £11.10 a day is added to pay |
| £11.10 a day or less | No effect |
| More than £11.10 a day | Only the excess above £11.10 reduces pay |
This matters most in hospitality, agriculture and care, where live-in arrangements are common and the charge is often set without reference to the offset at all.
What it costs to get wrong
HMRC can issue a notice of underpayment requiring repayment of the arrears plus a penalty of 200% of the underpayment, capped at £20,000 per worker. The penalty halves if the arrears and half the penalty are paid within 14 days. Where arrears reach £500, the employer can be referred for public naming.
The detail that turns a small problem into a large one: where the current rate is higher than the rate that applied at the time, arrears are calculated at today's rate. An underpayment from three years ago is repaid at £12.71, not at the rate in force back then — and it is repaid for every affected worker, not just the one who complained.
The record is the defence
In an HMRC enquiry the burden falls on the employer to show that minimum wage was paid. A rota showing rostered hours is not that evidence, because the question is what was worked, not what was planned.
This is the practical case for capturing actual time rather than assuming rostered time. Clock-in and clock-out records put a timestamp on the start and end of each shift, which is what settles an argument about whether the ten minutes before opening were paid. RosterElf's rota software keeps the two together, and exports approved timesheets to Xero so the hours reaching payroll are the hours actually worked. The record-keeping side is covered in timesheets and working time records, and minimum wage records specifically must be kept for six years — see how long to keep employee records.
Related guides
- How much holiday are UK staff entitled to? — the 5.6 weeks, and why 28 days is a cap
- How to calculate holiday pay — the 52-week reference period, which uses the same pay records
- Holiday for part-time and irregular-hours staff — 12.07% accrual and rolled-up holiday pay
- Bank holiday entitlement — whether premiums are required, and the four nations
Pay people for the hours they actually worked
Clock-in records, approved timesheets and a clean payroll export — so minimum wage compliance rests on evidence rather than the rota.
This guide summarises the National Minimum Wage rules as they generally apply and is not legal or payroll advice. Rates change on 1 April each year and entitlement depends on a worker's age, employment status and working arrangements. Check GOV.UK for the current rates, or take advice before relying on this for a specific case. It does not constitute legal, HR, or professional advice and should not be relied on as a substitute for advice specific to your business, workforce, or circumstances.
UK minimum wage questions
- From 1 April 2026 the rates are £12.71 for workers aged 21 and over (the National Living Wage), £10.85 for 18 to 20 year olds, and £8.00 for under-18s and eligible apprentices.
- They are two parts of the same system. The National Living Wage is the top band, payable to workers aged 21 and over. The National Minimum Wage is the term for the lower age bands and the apprentice rate. The National Living Wage should not be confused with the Real Living Wage, which is a voluntary rate set by the Living Wage Foundation and is not enforceable by HMRC.
- On 1 April every year. A rate that was lawful in March is not necessarily lawful in April, and the change catches out employers whose pay periods straddle the date. The new rate applies to pay reference periods beginning on or after 1 April.
- The apprentice rate of £8.00 applies to an apprentice who is under 19, or who is 19 or over and in the first year of their apprenticeship. Once an apprentice is both 19 or over and past the first year, they move to the rate for their age. A 21-year-old who has completed their first year is entitled to £12.71.
- The new rate applies from the start of the next pay reference period after the birthday, not mid-period. Age-band birthdays are a routine source of small, long-running underpayments because nothing in a payroll run flags them automatically.