National Minimum Wage 2026/27: Every Age Rate and How Your Pay Is Calculated

National Minimum Wage rates from April 2025 (2025/26 confirmed)

The government confirms NMW/NLW rates each April following the Low Pay Commission's recommendations. The 2025/26 rates (from 1 April 2025) are:

For 2026/27 rates: The Low Pay Commission typically reports in autumn and rates are confirmed in the Budget, taking effect from 1 April 2026. The government's stated ambition has been to align the NLW with two-thirds of median earnings. Always verify at gov.uk/national-minimum-wage-rates for the latest confirmed figures.

How to calculate whether you are being paid correctly

Hourly workers

Your calculation is straightforward: hourly pay must equal or exceed the NMW for your age group.

If you are paid £9.80/hr and are 22 years old: £9.80 < £12.21 → underpayment.

Salaried workers

Many people are paid a monthly salary rather than an hourly rate. HMRC calculates your effective hourly rate as:

Annual salary ÷ total hours worked per year = effective hourly rate

Where total hours worked per year = average weekly hours × 52.

Example: Monthly salary of £1,650, contracted 37.5 hours/week.

• Annual salary: £1,650 × 12 = £19,800
• Annual hours: 37.5 × 52 = 1,950 hours
• Effective hourly rate: £19,800 ÷ 1,950 = £10.15/hr

For a 22-year-old worker, £10.15 < NLW of £12.21 → underpayment by £2.06/hr.

Annual underpayment: £2.06 × 1,950 hours = £4,017 per year.

Worked example: Laura the retail worker

Laura is 22 years old and works 37.5 hours per week in a supermarket. Her employer pays her a monthly salary of £1,680.

Step 1 — Confirm her age bracket: 21 and over = National Living Wage of £12.21/hr applies.

Step 2 — Calculate minimum annual pay: £12.21 × 37.5hr × 52wk = £23,809.50/yr = £1,984.13/mo minimum.

Step 3 — Compare: Laura receives £1,680/mo = £20,160/yr.

Gap: £23,809.50 − £20,160 = £3,649.50 underpaid per year.

This is a serious compliance breach. Laura should speak to her employer first. If unresolved, she should contact HMRC's Pay and Work Rights helpline.

If Laura instead earns £2,100/month: £2,100 × 12 = £25,200 ÷ 1,950hr = £12.92/hr > £12.21 → compliant.

What counts as working time

Not all time at an employer's premises or in connection with the job is working time for NMW purposes. The rules are specific.

Time that DOES count as working time

• Travelling between work sites during the working day (e.g. a care worker travelling between clients' homes — not the first journey from home or last journey home).
• Mandatory training required by the employer (even if outside normal hours, even if at another location).
• On-call time when you must remain at your employer's premises (e.g. a duty manager required to stay on site).
• Time spent working even if the worker chose to work additional hours not required.
• Sleep-in shifts where the worker is required to be present and awake to respond (not the same as permitted to sleep — see care sector below).

Time that does NOT count as working time

• Commuting from home to your regular workplace (and the return journey).
• Voluntary overtime that was not requested or required by the employer.
• Genuine sleep-in shifts (care and social care sector) where the worker is permitted to sleep and only needs to respond to emergencies — following the Supreme Court ruling in Royal Mencap Society v Tomlinson-Blake (2021), time asleep during sleep-in shifts does not count. Only actual hours of work during the shift count.
• Rest breaks that are genuinely uninterrupted (the worker is free to leave the premises).

Deductions that can breach NMW

Some employer deductions can push effective pay below NMW even if gross pay looks compliant. Deductions that count toward NMW calculations (i.e. reduce "pay" for NMW purposes) include:

• Deductions for accommodation provided by the employer (accommodation offset applies: £9.99/day in 2025/26).
• Deductions for goods or services the worker must purchase from the employer (e.g. uniforms, tools that must be bought from the employer).
• Deductions for cash shortfalls where a worker is required to make up till shortfalls.

Deductions that do not reduce NMW pay:

• Tax and NI deductions (these don't affect gross pay).
• Employee pension contributions under auto-enrolment.
• Voluntary salary sacrifice arrangements (though some salary sacrifice structures can reduce NMW pay — employers must check).

Tips and the October 2024 rules

From 1 October 2024, the Employment (Allocation of Tips) Act 2023 came into force. Key rules:

1. All tips must be passed to workers and cannot be used to satisfy NMW obligations.
2. Employers must have a written tips policy explaining how tips are distributed.
3. Workers can request a statement of tips allocated to them in the previous 3 years.
4. Employment tribunals can order employers to redistribute withheld tips and award compensation.

This ended the practice — common in hospitality — of employers retaining service charges or managing tip pools in ways that effectively supplemented their own payroll budget rather than rewarding workers.

Apprentice rates — who qualifies

The apprentice rate (£7.55/hr in 2025/26) applies only to:

• Apprentices aged under 19, regardless of which year of their apprenticeship, OR
• Apprentices aged 19 or over who are in the first year of their apprenticeship.

An apprentice who is 19 or over and has completed their first year is entitled to the full NMW/NLW for their age group — not the apprentice rate.

Example: Marcus is 21, started an apprenticeship in September 2025. In his first year (to September 2026): apprentice rate £7.55/hr applies. From September 2026 (year 2 of apprenticeship): NLW of £12.21/hr applies.

Accommodation offset

If your employer provides accommodation, they can offset some of the value against your wages for NMW purposes. The 2025/26 accommodation offset is:

• £9.99 per day (or £69.93 per week)

This means if you earn £12.21/hr and the employer provides accommodation at £9.99/day, they may pay you as little as £12.21 − (£9.99 ÷ 8hr shift) = £12.21 − £1.25 = £10.96/hr effective. Any charge above the offset cannot be used to bring pay below NMW.

How to report underpayment

If you believe your employer is paying below NMW:

1. Keep your own records: payslips, bank statements, any written communication about your hours or pay.
2. Raise it with your employer first if you feel safe doing so — it may be a genuine payroll error.
3. Contact HMRC: Pay and Work Rights helpline — 0300 123 1100 (Monday–Friday, 8am–6pm). Reports can be made anonymously.
4. HMRC will investigate and can require the employer to pay arrears going back 6 years, plus impose civil penalties of up to 200% of unpaid wages.
5. Employment tribunal: if dismissed for raising NMW concerns, you have automatic unfair dismissal protection (no qualifying period needed).

HMRC publishes an annual naming and shaming list of employers found guilty of NMW underpayment. This carries significant reputational consequences.

National Minimum Wage vs Real Living Wage

The statutory minimum (NLW/NMW) is legally enforceable. Separately, the Real Living Wage is a voluntary higher rate set by the Living Wage Foundation based on actual living costs:

• Real Living Wage (UK): approximately £12.60/hr (2024/25)
• London Living Wage: approximately £13.85/hr (2024/25)

Around 15,000 UK employers have voluntarily accredited to pay the Real Living Wage. It is not legally required but is increasingly expected in certain sectors and by procurement contracts with public bodies.

Sources

• gov.uk: National Minimum Wage and National Living Wage rates
• gov.uk: Employment (Allocation of Tips) Act 2023
• HMRC: National Minimum Wage: accommodation
• Supreme Court: [Royal Mencap Society v Tomlinson-Blake [2021] UKSC 8]
• Living Wage Foundation: Real Living Wage rates