National Minimum Wage 2026: Rates, Rules and Underpayment Traps for Employers

The National Minimum Wage rates for 2026 took effect on 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 rate is £8.00. Workers must get at least their rate for the hours worked in each pay reference period.

Paying the headline rate is the easy part. Most underpayments we see come from deductions, unpaid time and salary sacrifice quietly pulling pay below the line. This guide covers both.

What are the National Minimum Wage rates for 2026/27?

These are the rates from 1 April 2026, published on GOV.UK’s National Minimum Wage and National Living Wage rates page, compared with 2025/26:

Age band	2025/26	2026/27	Increase	% increase
21 and over (National Living Wage)	£12.21	£12.71	50p	4.1%
18 to 20	£10.00	£10.85	85p	8.5%
Under 18	£7.55	£8.00	45p	6.0%
Apprentice	£7.55	£8.00	45p	6.0%

The apprentice rate applies to apprentices under 19, or aged 19 and over in the first year of their apprenticeship. After that first year, an apprentice aged 19 or over must get the rate for their age.

What does the National Living Wage 2026 mean in annual pay?

For a full-time worker on 37.5 hours a week:

• weekly: £12.71 × 37.5 = £476.625 (£476.63 rounded)
• annual: £476.625 × 52 = £24,784.50
• monthly: £24,784.50 ÷ 12 = £2,065.38 (rounded)

That is gross pay before tax and National Insurance. The employer cost is higher once you add employer NI and pension contributions; our employer cost calculator shows the full figure, and our guide to employer National Insurance for 2026/27 explains the NI side.

Who has to be paid the minimum wage?

Almost everyone classed as a “worker” who is at least school leaving age, including part-time, casual, agency, piece-rate and foreign workers, trainees and workers on probation. Contracts that pay below the minimum wage are not legally binding: the worker is still entitled to it. It makes no difference how small the employer is.

Groups not entitled include the genuinely self-employed, company directors, volunteers, family members living in the employer’s home, and students on a placement of up to one year as part of a higher or further education course. Internships need checking case by case.

When do new rates apply: what is a pay reference period?

A pay reference period is the period of time a payment covers, usually set by how often someone is paid (a week, a month, 10 days). It can never be longer than a calendar month. The worker must be paid at least the minimum wage, on average, for the time worked in each pay reference period.

New rates apply from the first pay reference period starting on or after 1 April. If a worker’s monthly period runs from the 16th, they stay on the old rate until 15 April and move to the new rate from 16 April.

Also watch birthdays: GOV.UK’s employer checklist lists failing to move workers up an age band at 18 and 21 as a common cause of underpayment.

What counts towards minimum wage pay?

The test is not simply “hourly rate on the contract”. You take the pay that counts, subtract anything that reduces it, and divide by the hours that count as working time.

Doesn’t count towards minimum wage pay (per the GOV.UK employer guide):

• payments for the employer’s own use or benefit
• tips, service charges and cover charges
• extra pay for working unsocial hours on a shift
• the premium element of overtime

Reduces minimum wage pay:

• deductions, or payments from the worker, for things connected with the job that aren’t refunded, such as tools, uniform and safety equipment
• pay given up through salary sacrifice
• accommodation charged above the offset rate

How does salary sacrifice affect the minimum wage?

In a genuine salary sacrifice, the worker gives up part of their contractual pay for a non-cash benefit. Because that pay is no longer theirs, it doesn’t count for minimum wage purposes. GOV.UK says employers must make sure salary sacrifice doesn’t take pay below the minimum wage, and each extra arrangement reduces pay further. A worker on or near £12.71 an hour usually can’t join a sacrifice scheme without breaching the rules.

What is the accommodation offset in 2026?

If you provide living accommodation, GOV.UK gives the offset as £11.10 a day or £77.70 a week. You can charge up to that amount without it affecting minimum wage pay. Anything above it reduces pay for minimum wage purposes. For example, if you charge £100 a week, £22.30 is counted as a reduction.

What are the most common underpayment traps?

Uniform and equipment deductions

Worked example. A worker is paid £12.80 an hour for 37.5 hours, so £480 a week, comfortably above £12.71. They pay £10 a week for a uniform that isn’t refunded. Minimum wage pay is £480 − £10 = £470, which is £470 ÷ 37.5 = £12.53 an hour. That is below £12.71, so the worker has been underpaid by £6.63 that week (£476.63 due minus £470).

Unpaid training and travel time

Time spent training, travelling between work assignments (for example a care worker driving between clients) and travelling from work to a training venue all count as working time. Ordinary commuting between home and work doesn’t, unless the worker is working while travelling. Unpaid handovers, security checks and time waiting at the workplace for work are other frequent problems.

Other traps

• paying the apprentice rate to someone who isn’t a genuine apprentice, or after the first year for those aged 19 and over
• salaried staff working extra hours so their pay per hour falls below the rate in a given period
• not applying the 1 April increase on time

Who enforces the National Minimum Wage now?

The Fair Work Agency was established on 7 April 2026, and GOV.UK now states that HMRC enforces the minimum wage on behalf of the Fair Work Agency. HMRC officers can check records at any time and investigate after a worker complains.

If you have underpaid, you must pay arrears straight away, calculated at the current rate for the worker’s age band, not the old rate. A notice of underpayment can also carry a penalty of up to 200% of the arrears, capped at £20,000 per worker (halved if you comply within 14 days), and employers can be publicly named. Not paying the minimum wage, or faking records, is a criminal offence.

What records do you need to keep?

Records proving you paid the minimum wage must be kept for at least 6 years from the end of the pay reference period after the one they cover. They can be paper or electronic, but you must be able to produce one pay reference period for one worker in a single document. Payroll records showing total pay, deductions and hours worked usually form the core, alongside contracts and timesheets. GOV.UK’s minimum wage calculator for employers is a useful spot check.

Borderline cases (sleep-in shifts, salaried hours work, interns) are worth specific advice before you rely on them.

Keeping minimum wage compliance in payroll

Minimum wage checks need to run every pay period, not once a year in April. Our payroll services apply the new rates on time, track age-band changes and flag deductions or sacrifices that would take a worker below the minimum wage before the payroll is paid.