Check the National Minimum Wage
The right rate by age and apprentice status, with an employer compliance check.
The National Living Wage rose by 50p to £12.71 an hour on 1 April 2026, a 4.1% increase, while the 18 to 20 rate jumped 8.5% to £10.85 [1] [2]. For a full-time adult worker on 37.5 hours a week, the uplift is worth around £977 a year in gross pay, and every pound of it lands on the employer's payroll bill [2].
The rise is not optional and it is not a guideline. HMRC enforces the minimum wage on behalf of the new Fair Work Agency, and the latest naming round published in September 2026 listed around 660 employers that had failed to pay it, with more than 27,000 workers owed arrears [5]. A significant share of those breaches did not come from deliberate underpayment but from payrolls that failed to apply the uprated figure, or from deductions that quietly pushed pay below the new floor [18].
This article sets out every rate that changed on 1 April 2026, explains exactly when the new figures apply in each pay cycle, works through the real employer cost of the increase once National Insurance and pension contributions are added, identifies the payroll traps that most often turn a rate rise into a breach, and looks at where the rates are heading next.
Key takeaways
- From 1 April 2026, the National Living Wage for workers aged 21 and over is £12.71 an hour, the 18 to 20 rate is £10.85, and the under-18 and apprentice rates are both £8.00 [1] [2].
- A new rate applies from the start of the first pay reference period beginning on or after 1 April, not from the next pay date [4].
- The real cost to the employer exceeds the headline pay rise, because employer National Insurance at 15% and auto-enrolment contributions both rise with pay [13] [15].
- Salary sacrifice and job-related deductions can take a worker below the new minimum even when the contractual hourly rate looks compliant [4].
- Underpayment carries a penalty of 200% of the arrears, up to £20,000 per worker, plus public naming once arrears exceed £500 [9].
- The Low Pay Commission's central estimate for the next National Living Wage, due from April 2027, is £13.18 an hour [7].
The rates that changed on 1 April 2026
The minimum wage is set annually by the government on the recommendation of the Low Pay Commission, an independent body that weighs earnings growth, inflation and business conditions [3]. The government accepted the Commission's recommendations in full and confirmed them on 26 November 2025, giving employers just over four months to prepare their payrolls [2].
The full rate table
Every age band and the accommodation offset moved on the same date. The table below compares the rates in force from 1 April 2026 with the figures they replaced [1] [2].
| Rate | Before 1 April 2026 | From 1 April 2026 | Increase |
|---|---|---|---|
| National Living Wage (21 and over) | £12.21 | £12.71 | 50p (4.1%) |
| 18 to 20 rate | £10.00 | £10.85 | 85p (8.5%) |
| 16 to 17 rate | £7.55 | £8.00 | 45p (6.0%) |
| Apprentice rate | £7.55 | £8.00 | 45p (6.0%) |
| Accommodation offset (per day) | £10.66 | £11.10 | 44p (4.1%) |
The pattern is deliberate. The youth rates rose faster than the adult rate for the third consecutive year, because the government has asked the Low Pay Commission to narrow the gap between the bands [3] [7].
Why the National Living Wage rose by 4.1%
The National Living Wage is anchored to a target of two-thirds of median hourly earnings for workers in its age group, which the government treats as the key reference point when setting the rate [2] [7]. The 4.1% rise was the increase the Commission judged necessary to hold that target, given its forecasts for wage growth across the economy [3].
The Commission's own data shows how many jobs sit close to the floor. Minimum wage coverage, measured as jobs paid within 5p of the relevant rate, reached 6.6% of employees, around 2 million jobs, in its most recent analysis [3]. For businesses in hospitality, retail, cleaning and social care, where coverage is highest, the uprating is one of the largest single payroll events of the tax year [3].
The 18 to 20 rate and the move towards a single adult rate
The 8.5% increase to the 18 to 20 rate is the clearest signal of policy direction. The government has committed to ending age banding for adults, and the Commission has set out a phased path in which the National Living Wage age threshold falls to 20 first and later to 18, subject to economic conditions [3] [7].
The Commission chose not to move 20-year-olds onto the adult rate from 1 April 2026, judging that a jump of more than 25% in a single step was too risky [3]. Employers with a young workforce should plan on the assumption that the youth rates will keep rising faster than the adult rate. A detailed breakdown of the youngest adult band sits in the guide to the minimum wage for an 18 year old.
When the new rate applies in each pay cycle
The most common technical error after an uprating is applying the new rate on the wrong date. The legal test is not the pay date, and it is not 1 April for every worker. It is the start date of the pay reference period [4].
The pay reference period rule
A pay reference period is the period for which a worker is paid, such as a week or a month, and it can never be longer than a calendar month [4] [11]. GOV.UK guidance states that a rate increase applies to the first pay reference period starting on or after the date of the change [4].
The practical effect depends on how each payroll is structured. The table below shows how three common pay cycles move to the new rate, following the method set out in the official guidance [4].
| Pay cycle | Pay reference period | First period at the new rate |
|---|---|---|
| Calendar monthly | 1st to end of month | 1 April to 30 April |
| Monthly, mid-month | 16th to 15th | 16 April to 15 May |
| Weekly, Monday start | Monday to Sunday | Week beginning Monday 6 April 2026 |
In the mid-month example, the old rate legitimately applies until 15 April, and the new rate applies from 16 April [4]. An employer that simply switches rates on the first pay date after 1 April may therefore be either early or late, and late is a breach [9].
Birthdays and age-band changes
The same timing rule governs a worker who crosses an age threshold. When a worker reaches a birthday that entitles them to a higher rate, the higher rate applies from the start of the next pay reference period, not from the birthday itself [4] [10].
A worker paid on a calendar-monthly cycle who turns 21 on 10 June therefore moves from £10.85 to £12.71 from 1 July. Payroll software that holds dates of birth can trigger this switch automatically, which removes one of the easiest errors for HMRC to detect at inspection [9]. Modern HMRC-recognised payroll software for SMEs applies age-band changes and annual uprating from the correct period without manual reconfiguration.
Salaried workers and annual hours
Salaried staff are not exempt from the increase. For salaried hours work, compliance is tested by dividing pay in the reference period by the basic hours the salary covers [4] [12].
A salaried worker aged 21 or over contracted for 37.5 hours a week works 1,950 basic hours a year. At £12.71, the minimum annual salary is £24,784.50, or £2,065.38 a month [1]. Any salaried employee on less than that figure from 1 April 2026 needs a pay increase, even if their salary was compliant at the old rate of £12.21, which equated to £23,809.50 for the same hours [2].
The true employer cost of the increase
The headline rise understates what an employer actually pays. Employer National Insurance and auto-enrolment pension contributions are both calculated on earnings, so they rise automatically with the minimum wage [13] [15].
Employer National Insurance on top of the rise
From 6 April 2025, employer National Insurance has been charged at 15% on earnings above the Secondary Threshold of £5,000 a year [13]. Because almost every full-time minimum wage worker earns well above that threshold, each extra pound of pay costs the employer an additional 15p in National Insurance [13].
Smaller employers can offset part of the cost. The Employment Allowance reduces an eligible employer's annual Class 1 National Insurance bill by up to £10,500 [17]. For a business with a handful of staff, the allowance can absorb the whole National Insurance element of the rise, but it is claimed once per tax year through the Employer Payment Summary and does not happen automatically [17].
Auto-enrolment contributions
Workers aged 22 to State Pension age earning more than £10,000 a year must be automatically enrolled into a workplace pension, with the employer paying at least 3% of qualifying earnings [15] [16]. Qualifying earnings are calculated on the band between £6,240 and £50,270, so a higher wage means a higher employer contribution [16].
The increase can also bring new workers into scope. A part-time worker whose earnings cross the £10,000 trigger because of the rate rise becomes an eligible jobholder and must be assessed and enrolled [16]. The mechanics of that assessment are covered in the guide to auto-enrolment explained.
A worked example for a full-time worker
The table below shows the annual cost to an employer of one full-time worker aged 21 or over on 37.5 hours a week, paid exactly the National Living Wage, before and after the increase. It assumes 52 paid weeks, employer National Insurance at 15% above £5,000, and a 3% employer pension contribution on qualifying earnings above £6,240 [1] [13] [15].
| Cost element | At £12.21 an hour | At £12.71 an hour | Increase |
|---|---|---|---|
| Gross pay | £23,809.50 | £24,784.50 | £975.00 |
| Employer National Insurance | £2,821.43 | £2,967.68 | £146.25 |
| Employer pension (3%) | £527.09 | £556.34 | £29.25 |
| Total employer cost | £27,158.02 | £28,308.52 | £1,150.50 |
On these assumptions, every £1 of extra minimum wage costs the employer around £1.18 in total. Across a team of 20 full-time minimum wage workers, the uprating adds more than £23,000 a year to the payroll bill before any knock-on increases for supervisors [13] [15].
Pay differentials and knock-on increases
The rise rarely stops at minimum wage staff. Supervisors and team leaders paid a small premium above the floor see that premium shrink, and many employers restore differentials to preserve progression [3]. The Low Pay Commission tracks this compression closely, noting that the minimum wage has been rising faster than pay further up the distribution [3] [7].
Accountants and bureaux modelling the increase across several clients usually run the uprating as a bulk scenario before the first affected pay period. A multi-client payroll dashboard makes it possible to flag every worker whose new hourly rate falls below the floor, across every client, in a single pass.
Payroll traps that turn a rate rise into a breach
Most minimum wage breaches do not involve a contractual rate below the legal minimum. They involve deductions, unpaid time or pay arrangements that pull the effective hourly rate below it [4]. The common causes identified in the latest naming round include deductions that take pay below the minimum, unpaid working time, failure to pay the uprated rate and incorrect apprentice rates [18].
Salary sacrifice
Salary sacrifice is the trap most often exposed by an uprating. GOV.UK guidance states that where a salary sacrifice is in place, the worker no longer has entitlement to the sacrificed pay, so pay for minimum wage purposes is reduced by that amount [4]. Each additional arrangement reduces it further [4].
Consider a worker aged 21 or over on £12.80 an hour, contracted for 37.5 hours a week and paid monthly. Monthly pay is £2,080 for 162.5 hours. If the worker sacrifices £100 a month into a pension, minimum wage pay falls to £1,980, an effective rate of £12.18 an hour, which is below £12.71 [1] [4]. The same arrangement was compliant before 1 April 2026, which is why sacrifice schemes need checking at every uprating.
Deductions and worker-funded costs
Deductions for the employer's own use and benefit, and costs connected with the job that the worker bears, reduce minimum wage pay [4]. The table below separates the deductions that affect the minimum wage calculation from those that do not, as set out in the official guidance [4] [11].
| Reduces minimum wage pay | Does not reduce minimum wage pay |
|---|---|
| Required uniform or PPE paid for by the worker | PAYE income tax and National Insurance |
| Mandatory training charged to the worker | Student loan repayments |
| Transport arranged by the employer and deducted from wages | Repayment of an agreed advance or loan |
| Deductions the employer is free to use as it wishes | Recovery of an accidental overpayment |
A worker on £12.71 an hour for 40 hours earns £508.40 in a week. A £25 deduction for a compulsory uniform in that week reduces minimum wage pay to £483.40, an effective rate of around £12.09 an hour, and creates an underpayment [1] [4].
Unpaid working time
Every hour a worker is required to be at work counts towards the calculation, including mandatory training, briefings, security checks and time spent waiting at the workplace [12]. A worker paid exactly £12.71 for a rostered shift who is required to arrive 15 minutes early for an unpaid briefing is paid below the minimum for the whole period [12] [9].
The margin for error shrinks every time the rate rises. A pay rate set a few pence above the old minimum offers no buffer at all once the new rate applies, which is why rate checks and time-recording checks belong together.
Accommodation and tips
Accommodation is the only benefit in kind that can count towards minimum wage pay, through the accommodation offset of £11.10 a day from 1 April 2026 [1]. If an employer charges more than the offset, the excess reduces minimum wage pay, so any accommodation charge set by reference to the old £10.66 figure needs reviewing [2] [4].
Tips, gratuities and service charges never count towards the minimum wage, however they are paid [11]. An employer cannot use tip income to make up a shortfall against the new rate [11].
Enforcement, penalties and the Fair Work Agency
Minimum wage enforcement changed hands on 7 April 2026. The Fair Work Agency, a new body within the Department for Business and Trade, absorbed HMRC's National Minimum Wage unit alongside other labour market enforcers, and HMRC continues to carry out enforcement on its behalf [5] [8].
Penalties and naming
When an underpayment is found, the employer receives a notice of underpayment requiring arrears to be paid at the current rate, plus a penalty [9]. The table below summarises the main sanctions set out in the official guidance [9].
| Sanction | Detail |
|---|---|
| Arrears | Repaid to each worker at the current minimum wage rate |
| Civil penalty | 200% of the arrears, maximum £20,000 per worker |
| Early payment discount | Penalty halved if arrears and penalty are paid within 14 days |
| Public naming | Applies where total arrears exceed £500 |
| Criminal prosecution | Possible in the most serious cases |
The scale is significant. The March 2026 naming round listed 389 employers that owed more than £7.3 million to around 60,000 workers, with £12.6 million in penalties issued [6]. The September 2026 round, the first since the Fair Work Agency launched, named around 660 more [5].
Records and payslips
Employers must keep minimum wage records for six years and be able to produce them for any pay reference period [11]. Where pay varies with time worked, payslips must show the number of hours paid, which gives both the worker and an inspector a direct way to check the effective hourly rate [14] [11].
Clean records are the strongest defence at inspection. Payroll built on an HMRC-recognised payroll API can store hours, rates, deductions and sacrifice amounts per pay reference period, so the minimum wage test can be run and evidenced on every payrun rather than reconstructed after a complaint.
A checklist for every uprating
The same steps apply every April. The sequence below reflects the timing, calculation and record-keeping rules in the official guidance [4] [11].
- Identify every worker paid within a small margin of their age-band rate, including salaried staff on annual hours.
- Confirm the start date of each pay reference period and apply the new rate from the first period starting on or after 1 April.
- Recalculate effective hourly pay after salary sacrifice, job-related deductions and accommodation charges.
- Check age-band and apprentice-year transitions due in the coming months.
- Reassess auto-enrolment eligibility for workers who cross the £10,000 trigger.
- Review pay differentials for supervisors and team leaders.
- Retain evidence of the check alongside payroll records.
Small businesses running this process by hand often find step 3 the hardest, because sacrifice and deduction data sits outside the pay rate itself. The wider set of obligations is set out in the guide to minimum wage rates and rules, and dedicated payroll for SMEs can automate most of the list.
What comes next: the April 2027 rates
The Low Pay Commission is already working on the next increase. In its consultation for the rates due from April 2027, it published a central estimate of £13.18 an hour for the National Living Wage, a rise of 3.7%, within an illustrative range of £13.02 to £13.34 [7]. The Commission stresses that the range is a guide only and will be revised as earnings data changes [7].
The government's remit keeps two-thirds of median earnings as the key reference point, alongside cost of living, business conditions and youth employment prospects [7]. The Commission has also discussed lowering the National Living Wage age threshold to 20 from April 2027, which would move every 20-year-old onto the adult rate in a single step [3]. The final rates are normally confirmed in the autumn, a few months before they take effect, and the full picture of the adult rate sits in the guide to the National Living Wage.
Check pay against the new minimum wage
Before each payrun, an employer can confirm that a worker's pay meets the correct age-band rate with the Moonworkers minimum wage calculator, which applies the rates in force from 1 April 2026 to any hourly rate, salary or hours pattern.
To show weekly and annual equivalents
Not sure about the profile? Use the NI category as a shortcut
The rate depends on age and apprenticeship, not the NI letter; the letter just pre-fills the profile.
Rates from 1 April 2026
Enter the worker's age to get their exact band, weekly and annual equivalents.
Never worry about minimum wage compliance again
Moonworkers applies the right rate for every age and apprentice status automatically, flags underpayment before you submit, and keeps the 6-year records HMRC requires.
Conclusion
The increase that took effect on 1 April 2026 is more than a new hourly figure. It moves the timing of pay changes to each worker's pay reference period, raises employer National Insurance and pension costs in step with pay, and turns previously compliant salary sacrifice schemes and deductions into potential breaches. The employer that treats the uprating as a single rate change in the payroll settings is the employer most likely to appear in a future naming round.
The direction of travel is clear. With a central estimate of £13.18 for April 2027 and a stated plan to fold the youngest adults into the National Living Wage, the floor will keep rising faster than many pay structures above it. Payrolls that test effective hourly pay automatically, on every period, will absorb each uprating as routine rather than as an annual compliance risk.
Frequently asked questions
When did the minimum wage increase take effect?
The new rates took effect on 1 April 2026 [1]. For each worker, the new rate applies from the start of the first pay reference period beginning on or after that date, so a payroll running from the 16th of each month moved to the new rate on 16 April [4]. Paying the old rate for any part of a period that started on or after 1 April is an underpayment.
How much did the National Living Wage go up by?
The National Living Wage for workers aged 21 and over rose by 50p, from £12.21 to £12.71 an hour, an increase of 4.1% [2]. For a full-time worker on 37.5 hours a week, the government estimates the rise at around £977 a year in gross pay [2]. The 18 to 20 rate rose faster, by 8.5% to £10.85.
Does the minimum wage increase apply to salaried staff?
Yes. A salaried worker must receive at least the minimum wage for the basic hours the salary covers, tested over each pay reference period [4]. A worker aged 21 or over contracted for 37.5 hours a week needs an annual salary of at least £24,784.50 from 1 April 2026 [1]. Salary sacrifice can reduce pay below that level even when the contractual salary is above it.
What is the minimum wage likely to be from April 2027?
The Low Pay Commission's central estimate for the National Living Wage from April 2027 is £13.18 an hour, within a range of £13.02 to £13.34 [7]. The figure is an estimate, not a confirmed rate. The government usually announces the final rates in the autumn, after receiving the Commission's recommendations.
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