Here’s what employers need to know about pay rates for 2026, who gets which rate by age, and the steps to take if someone’s pay changes. We set out the key figures, compare them with past years, and give practical payroll steps — all aimed at UK employers who need workable numbers today.

Key figures (quick reference)

Here are the headline figures payroll teams rely on — shown up front so you can check them quickly. If 2026 rates aren’t yet out, we use the confirmed April 2024 figures and clearly label any forward-looking estimates for April 2026.

  • National Living Wage (age 23+) — statutory: £11.44 per hour (rate in force from April 2024)
  • National Minimum Wage (age 21–22) — statutory: £10.18 per hour (April 2024)
  • National Minimum Wage (age 18–20) — statutory: £7.49 per hour (April 2024)
  • National Minimum Wage (under 18) — statutory: £5.28 per hour (April 2024)
  • Apprentice rate — statutory: £5.28 per hour (April 2024)
  • Penalty for underpaying the minimum wage: up to 200% of arrears, capped at £20,000 per worker
  • Employers must keep payroll and hours records for at least 3 years
  • Example weekly gross for a 40-hour week at NLW (£11.44): £457.60; monthly (approx): £1,982
  • Year-on-year increase: NLW rose from £10.42 (April 2023) to £11.44 (April 2024) — a rise of about 9.8%
  • Forecast range for NLW in April 2026: £11.80–£12.40 (scenario-based projections — see Forecast section)

Detailed breakdown: statutory rates, examples and history

The UK has two related frameworks: the National Living Wage (NLW) for older workers and the National Minimum Wage (NMW) for younger workers and apprentices. The government regularly updates these rates in April each year, following the Low Pay Commission’s recommendations. This rates used below are the latest confirmed statutory figures (effective April 2024) and are presented so employers can compare with previous years and plan payroll.

Statutory hourly rates (to April 2024):

  • Age 23 and over (National Living Wage): £11.44
  • Age 21–22: £10.18
  • Age 18–20: £7.49
  • Under 18: £5.28
  • Apprentice rate (apprentices under 19, or 19+ in first year): £5.28

Historical context — selected years:

  • April 2022: NLW (23+) £9.50
  • April 2023: NLW (23+) £10.42
  • April 2024: NLW (23+) £11.44

Example pay calculations (gross):

  • 40 hours at £11.44 = £457.60 per week; annual (52 weeks) = £23,795.20
  • 37.5 hours at £11.44 = £429.00 per week; monthly (approx) = £1,858
  • 40 hours at £10.18 (age 21–22) = £407.20 per week; annual = £21,166.40
  • 40 hours at apprentice rate £5.28 = £211.20 per week; annual = £10,982.40

What employers must pay and record

Basically, employers are legally required to pay at least the appropriate hourly rate for every hour worked, including training time and sleep-in shifts where time counts as working time. That includes agency workers, casuals and most interns who work for more than a short period.

Core employer duties:

Mastheads
  • Pay at least the correct statutory rate for the worker’s age or status; keep rates under review.
  • Keep payroll records and records of hours worked for at least three years — records must show pay, hours, and any deductions.
  • If underpayments are discovered, employers must calculate arrears and repay the worker. HMRC enforces non-compliance.
  • Pension automatic enrolment and statutory payments (statutory sick pay or statutory maternity pay) are separate obligations — they don't replace minimum wage duties.

Penalties and enforcement:

  • HMRC can assess underpayments and requires repayment of arrears to workers.
  • Penalty of up to 200% of the total arrears, capped at £20,000 per worker, can be imposed.
  • Public naming and record of enforcement action is possible where breaches are serious.

How to apply rates in payroll — practical steps

Payroll errors usually come down to sloppy process, not bad people. Small firms often slip up on overtime, bonuses or deductions, while larger employers more commonly tangle with complex shift patterns and sleep-in arrangements. Use the steps below to avoid common payroll traps.

  • 1. Assign the correct age band to every worker on the pay date. Use the pay date, not the hire date.
  • 2. Calculate all hours that count as working time — training, short-notice cover, and some travel count.
  • 3. Include non-cash payments and perks only where allowed — and only if they meet the strict legal tests for being included in minimum wage calculations.
  • 4. Run a retrospective check after annual rate updates — many employers find underpayments when rates rise significantly. Recalculate arrears back to the date the incorrect rate started.
  • 5. Keep clear, dated records for each worker: hours, rates, gross pay, deductions and the method used to calculate minimum wage compliance.

Tips for common payroll questions

But what about overtime and bonuses? And apprentices?

  • Overtime counts as working time for minimum-wage checks, and you can't use averaging tricks that leave someone earning less than the statutory hourly rate.
  • Bonuses: Discretionary bonuses can’t be used to meet minimum wage unless they're contractual and regular; care is needed.
  • Apprentices: If under 19, or 19+ in first year of apprenticeship, pay the apprentice rate. If over 19 and beyond first year, the appropriate age-related rate applies.
  • Sleep-in shifts: Only the time counted as working time must reach the minimum wage — fixed flat payments can be lawful if they result in hourly pay at or above the statutory rate when worked hours are counted.

Regional differences and voluntary living wages

Statutory minimums are UK-wide, but cost-of-living and pay expectations differ by region.

  • Statutory rates are the same in England, Scotland, Wales and Northern Ireland.
  • Many London employers pay the Real Living Wage set by the Living Wage Foundation — in 2024 that voluntary UK Real Living Wage was higher than the statutory NLW and varied by region. Employers in London often pay a regional voluntary rate.
  • For public sector contractors and universities, UCAS and procurement frameworks may specify living wage clauses — check contract terms.

Forecast and what to plan for in 2026

Official 2026 statutory rates depend on the Low Pay Commission’s recommendation and government acceptance.

Where official figures aren’t yet published, employers should model scenarios.

Scenario-based projections for April 2026 (illustrative):

  • Low-inflation scenario (+3% per year from £11.44): NLW ≈ £12.17 (April 2026)
  • Moderate-inflation scenario (+4% per year): NLW ≈ £12.41 (April 2026)
  • High-inflation scenario (+6% per year): NLW ≈ £12.86 (April 2026)

Plan payroll budgets for at least a 5–10% per-year increase while keeping an eye on the Low Pay Commission’s interim statements. Update contracts and payroll systems in January–March so April rate changes can be applied immediately to the first pay date after implementation.

Where to check and next steps

Employers should check the official gov.uk minimum wage pages and HMRC guidance for enforcement. The Office for National Statistics (ONS) publishes pay and earnings data that helps with budgeting and pay benchmarking, while the Living Wage Foundation publishes voluntary rates for employers who want to pay above statutory levels.

Practical checklist this quarter:

  • Run a review of all hourly workers and their age bands.
  • Recalculate pay for any salaried staff who might fall below the hourly minimum when hours vary.
  • Update payroll software with contingency rates for April.
  • Train managers on what counts as working time, and update contracts or staff handbooks if necessary.

Related Articles

Statutory minimum rates provide a legal floor, but year-on-year rises have been material. Employers should use the April 2024 statutory figures as the last confirmed baseline — and build a 5–10% per-year wage budget for 2025–26 to be safe. Keep clear records, check age bands on each pay date and treat any historical underpayment seriously — HMRC can require repayment and impose penalties up to 200% of arrears (capped at £20,000 per worker). For voluntary higher pay, Look at the Living Wage Foundation rates for regional benchmarking and staff retention.

This article was created with AI assistance.