Check the National Minimum Wage
The right rate by age and apprentice status, with an employer compliance check.
The National Living Wage rose to £12.71 an hour for workers aged 21 and over on 1 April 2026, a 4.1% increase, while the rate for 18 to 20 year olds climbed 8.5% to £10.85 [1]. Those two figures sit at the centre of a compliance regime that reaches every UK employer, because the minimum wage is not a target to aim for but a legal floor that applies to almost every worker on a payroll.
Getting it wrong is expensive. HMRC can charge a penalty of up to 200% of the arrears, capped at £20,000 per worker, and publish the employer's name once total arrears pass a modest threshold [2]. Most underpayment is not deliberate. It comes from deductions, unpaid working time and salary arrangements that quietly push an hourly rate below the legal minimum.
This article sets out the rates for the 2026-27 tax year, explains who is entitled, shows how the minimum wage is calculated across a pay reference period, and works through the deductions and pay elements that most often trip employers up. It closes on how HMRC enforces the rules and where the policy is heading.
Key takeaways
- The National Living Wage for workers aged 21 and over is £12.71 per hour from 1 April 2026, with lower rates of £10.85 for 18 to 20 year olds and £8.00 for under-18s and apprentices.
- Entitlement is based on worker status, not job title, so casual, zero-hours and agency workers all qualify while genuinely self-employed contractors do not.
- The minimum wage is tested as an average across a pay reference period that can never be longer than one calendar month.
- Deductions for items connected with the job, and salary sacrifice that cuts cash pay too far, are the most common causes of accidental underpayment.
- HMRC can levy a penalty of 200% of arrears up to £20,000 per worker and name the employer publicly, and minimum wage records must now be kept for six years.
The minimum wage rates for the 2026-27 tax year
The UK operates a single statutory pay floor with different rates by age, plus a separate apprentice rate. All of the rates below took effect on 1 April 2026 and apply across England, Scotland, Wales and Northern Ireland [3]. The National Living Wage is the headline rate for adults; the lower bands apply to younger workers and first-year apprentices.
| Category | Hourly rate from 1 April 2026 | Change on the previous year |
|---|---|---|
| National Living Wage (21 and over) | £12.71 | +4.1% |
| 18 to 20 year olds | £10.85 | +8.5% |
| Under 18 (above school leaving age) | £8.00 | +6.0% |
| Apprentice rate | £8.00 | +6.0% |
The rates change every April, which is why payroll teams running wages in-house need a reliable way to apply the right figure to each worker at the start of each pay reference period [4]. Modern HMRC-recognised payroll software for SMEs applies the correct band automatically based on the worker's age, but the responsibility for paying the floor always rests with the employer.
How the age bands work
A worker moves onto the National Living Wage from the first pay reference period that starts on or after their 21st birthday [5]. Before that, an 18 to 20 year old is entitled to the youth development rate of £10.85, and a worker above compulsory school leaving age but under 18 is entitled to £8.00 [6].
The 8.5% rise for 18 to 20 year olds is the largest of the year, and it is deliberate. The Low Pay Commission has been asked to narrow the gap between the youth rate and the adult rate over time, with a view to a single adult minimum wage, so the younger bands are rising faster than the National Living Wage itself [7].
The apprentice rate and when it ends
The apprentice rate of £8.00 is the most misapplied figure in the whole regime. It applies only to an apprentice who is under 19, or who is 19 or over and in the first year of their current apprenticeship [8]. The moment an apprentice aged 19 or over completes the first year, they move onto the rate for their age [9].
The practical trap is a 21 year old apprentice in the second year of training. That worker is no longer entitled to the apprentice rate; they must receive the full National Living Wage of £12.71 [10]. An employer who leaves such an apprentice on £8.00 is underpaying by £4.71 an hour, and the arrears accumulate quickly across a full-time role.
Who is entitled to the minimum wage
Entitlement follows employment status, not the label on a contract. Almost everyone who personally performs work for a UK business is a worker for minimum wage purposes, and a worker is entitled to the minimum wage regardless of how their pay is structured [11].
Workers who qualify
The entitlement covers employees on full-time, part-time and fixed-term contracts, and it extends well beyond them [12]. Casual staff, zero-hours workers, agency workers, homeworkers, pieceworkers and commission-only workers are all entitled to at least the minimum wage, provided they are above compulsory school leaving age.
HMRC assesses minimum wage entitlement separately from tax status, which matters for any business that treats staff as self-employed [13]. A worker labelled self-employed for tax may still be a worker for minimum wage purposes, and the employer carries the liability if that classification is wrong.
Who is excluded
A smaller group falls outside the minimum wage. Genuinely self-employed people running their own business do not qualify, nor do company directors who have no worker contract, volunteers receiving only reasonable expenses, and family members living in the employer's home who work in the family business [14]. Workers below school leaving age and prisoners working under prison rules are also excluded.
The exclusions are narrow and are read strictly. Describing a worker as a volunteer or a self-employed contractor does not remove the entitlement if the reality of the relationship is one of work for pay [15].
How the minimum wage is actually calculated
The minimum wage is not tested shift by shift. It is tested as an average hourly rate across a pay reference period, which means an employer has to look at total qualifying pay and total working hours together [16].
The pay reference period
The pay reference period is the interval an employer uses to pay a worker, whether weekly, fortnightly or monthly, but it can never be longer than one calendar month [17]. Compliance is measured by dividing total qualifying pay in the period by total hours worked in the period, and the result must be at least the worker's rate.
A payment relates to the period in which it is earned, but where it is paid in a later period it generally counts in the period of payment [18]. This timing rule matters for bonuses and arrears, which can lift pay in the period they land rather than the period they relate to.
What counts as pay, and what never does
Not all money paid to a worker counts towards the minimum wage. Basic wages, performance bonuses, commission tied to the individual's own output and piece-rate payments all count [19]. Several common pay elements are excluded entirely, and including them in the calculation is a frequent cause of underpayment.
| Counts towards minimum wage pay | Never counts |
|---|---|
| Basic salary and wages | Tips, gratuities and service charges |
| Performance bonuses | Overtime and shift premiums (the extra element only) |
| Individual commission | Allowances for unsocial hours, on-call or location |
| Piece-rate payments | Genuine expense reimbursements |
| Accommodation offset (see below) | Benefits in kind other than accommodation |
Tips can never count towards the minimum wage, no matter how they are paid [20]. Under the Employment (Allocation of Tips) Act 2023, employers must pass on 100% of tips to workers and cannot use them to make up the minimum wage [21].
Deductions that put an employer at risk
Deductions are where accidental underpayment most often happens. The rule is simple to state and easy to breach: any deduction made for the employer's own benefit, or connected with the worker's employment, reduces the pay that counts towards the minimum wage [22].
Deductions that reduce minimum wage pay
Deductions for items connected with the job pull a worker's qualifying pay down. That includes the cost of a uniform, tools, safety equipment and mandatory training, as well as any till shortfall or disciplinary deduction passed on to the worker [23]. A worker paid exactly the National Living Wage who then has £10 taken for a uniform has, in law, been paid below the minimum wage for that period.
The risk is sharpest in sectors with uniforms, equipment costs or cash handling, because the deductions feel routine but the effect on the hourly rate is immediate [24]. An employer running wages through small business payroll should model the net hourly rate after every job-related deduction, not just the headline gross rate.
Deductions that do not reduce it
Not every deduction is a problem. PAYE income tax and National Insurance, student loan repayments and genuine auto-enrolment pension contributions do not reduce minimum wage pay [25]. Deductions a worker freely agrees to for their own benefit, such as a savings scheme or a gym membership that is not connected with the employer's business, also sit outside the calculation [26].
The distinction is always about who benefits. A deduction that funds something the worker chooses for themselves is fine; a deduction that transfers a business cost to the worker is not [27].
Salary sacrifice and the minimum wage floor
Salary sacrifice reduces a worker's cash pay in exchange for a non-cash benefit, which creates an obvious tension with the minimum wage. An employee cannot sacrifice salary below the minimum wage, because sacrificed pay is no longer cash pay that counts towards the floor [28]. This is why pension, cycle and other sacrifice schemes have to be checked against each worker's remaining hourly rate.
Where a sacrifice would take a worker below the floor, the employer has to offer a lower-value arrangement, cap the amount sacrificed, or keep the worker out of the scheme [29]. Payroll software that flags the breach before the payrun prevents the error reaching a payslip.
Accommodation, the only benefit that counts
Accommodation is the single exception to the rule that benefits in kind do not count towards the minimum wage. Where an employer provides accommodation, a daily or weekly offset can be included in the worker's pay for minimum wage purposes [30]. From 1 April 2026 the offset is £11.10 a day or £77.70 a week.
The three scenarios below set out how the offset interacts with any charge the employer makes for the accommodation [31].
| Employer arrangement | Effect on minimum wage pay |
|---|---|
| Accommodation provided free | The offset (£11.10 a day) is added to the worker's pay |
| Charge at or below the offset rate | No effect on minimum wage pay |
| Charge above the offset rate | The excess over £11.10 a day reduces minimum wage pay |
If an employer charges £14.00 a day for accommodation, the £2.90 excess over the £11.10 offset reduces the worker's qualifying pay by that amount each day [32]. In a sector such as agriculture or hospitality, where accommodation is commonly provided, the offset calculation is a standard part of staying compliant.
The four types of work and how hours are counted
How hours are counted depends on the type of work, and getting the hours wrong is as serious as getting the rate wrong. UK minimum wage law recognises four categories, each with its own rule for which hours attract the minimum wage [33].
| Type of work | Definition | Hours that count |
|---|---|---|
| Time work | Paid by the hour or shift | All hours on shift, including waiting and available time |
| Salaried hours work | Annual salary for set basic hours | Contracted basic hours spread across the year |
| Output work | Paid per piece or task | Actual hours worked, or a fair estimate agreement |
| Unmeasured work | No set hours, worked as required | Actual hours, or a written daily average agreement |
The time work category causes the most difficulty, because waiting time and time spent available at the workplace both count, even when the worker is not actively busy [34]. Travel between assignments during the working day counts too, which affects care workers and other mobile staff. For unmeasured work, a daily average agreement must be in writing, agreed before the pay reference period starts and a realistic estimate of daily hours [35].
How HMRC enforces the minimum wage
Enforcement is active and well funded, and it increasingly relies on worker complaints and targeted sector campaigns. HMRC can inspect records, interview workers and issue a Notice of Underpayment requiring the employer to repay all arrears [36]. Accountants who manage this exposure across many clients at once typically rely on a multi-client payroll dashboard that checks each scheme against the current rates on every payrun.
Penalties and the naming scheme
The financial penalty is 200% of the total underpayment across all affected workers, subject to a maximum of £20,000 per worker and a minimum of £100 [37]. The penalty is halved if the employer pays the arrears and half the penalty within 14 days, so prompt correction materially reduces the cost [38].
On top of the financial penalty, the government publishes the names of employers who underpay once total arrears exceed a set threshold. A recent naming round announced nearly 660 employers that had failed to pay the minimum wage, covering businesses of every size and sector [39]. Reputational exposure, for many businesses, outweighs the fine itself.
Record-keeping
Employers must keep minimum wage records capable of showing that each worker has been paid at least the minimum wage for every pay reference period [40]. Those records must now be kept for six years, and a worker has the right to inspect their own records on request [41]. Clear, auditable records are the employer's primary defence if HMRC opens an enquiry, which is one reason itemised payslip deductions that show hours worked matter so much for any worker whose pay varies by time. An occasional employer who needs to produce a single compliant payslip can use an instant payslip generator rather than running a full payroll.
Check minimum wage pay for any worker
Before confirming a rate, a rota or a salary sacrifice arrangement, an employer can sense-check the numbers with the Moonworkers minimum wage calculator, which applies the 2026-27 rates to any age band and set of hours.
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 minimum wage is a deceptively simple rule sitting on top of a detailed calculation. The rate is easy to look up; the hard part is making sure that after deductions, unpaid working time and any salary sacrifice, the average hourly pay across the reference period still clears the floor for every worker. The businesses that fall foul of HMRC are rarely trying to underpay. They have miscounted hours, passed on a cost they should have absorbed, or left an apprentice on the wrong rate for a year.
The direction of travel is towards a single adult minimum wage, with the younger bands rising faster than the National Living Wage to close the gap. That means the compliance bar moves every April and the cost of a mistake grows with it. Treating the minimum wage as a continuous payroll check, rather than an annual rate update, is what keeps an employer on the right side of a regime that HMRC enforces with real penalties and public naming.
Frequently asked questions
What is the UK minimum wage per hour from April 2026?
From 1 April 2026 the National Living Wage for workers aged 21 and over is £12.71 an hour. The rate for 18 to 20 year olds is £10.85, and the rate for workers under 18 and for first-year apprentices is £8.00 [1]. All four rates apply across the whole of the UK and change again the following April.
Does the minimum wage apply to zero-hours and agency workers?
Yes. Minimum wage entitlement is based on worker status rather than the type of contract, so casual, zero-hours and agency workers are all entitled to at least the minimum wage [12]. HMRC assesses entitlement separately from tax status, so a worker treated as self-employed for tax may still qualify.
Can an employer deduct the cost of a uniform from the minimum wage?
An employer can deduct the cost of a uniform, but if that deduction takes the worker's average pay below the minimum wage for the pay reference period, it creates an underpayment [23]. Deductions for items connected with the job, including uniforms, tools and mandatory training, reduce the pay that counts towards the minimum wage, so the net hourly rate must be checked after the deduction.
What penalty does HMRC charge for underpaying the minimum wage?
HMRC can charge a penalty of 200% of the total arrears owed to workers, capped at £20,000 per worker and with a minimum of £100 [37]. The penalty is halved if the employer pays the arrears and half the penalty within 14 days, and the government also publishes the names of employers whose arrears exceed a set threshold [39].
