As a business owner, payroll manager, or employer, keeping pace with statutory employment updates is essential for maintaining complete compliance. Significant changes have taken effect across the UK, meaning you must audit and update your pay structures immediately.
By law, the National Minimum Wage (NMW) and National Living Wage (NLW) are the absolute minimum hourly rates you must pay your workers, regardless of how many people you employ. Failing to meet these legal thresholds can result in severe penalties, public naming-and-shaming, and mandated back-pay for affected staff.
When Do the New Rates Take Effect?
Rates increase on 1 April each tax year. You must use the new rates from the first full pay period starting on or after 1 April 2026.
(Note: If an employee’s pay period covers dates both before and after 1 April, the old rate still applies to that entire pay cycle. The updated rate must be fully applied starting from the very next payroll period.)
The New NMW and NLW Rates from 1 April 2026
Below are the legal statutory hourly rates that apply to pay periods starting on or after 1 April 2026:
| Wage Band | Hourly Rate (From 1 April 2026) |
| National Living Wage (Aged 21 and over) | £12.71 |
| 18 to 20 Year Old Rate | £10.85 |
| Under 18 Rate (16-17) | £8.00 |
| Apprentice Rate | £8.00 |
Crucial Rule for Apprentice Rates
Apprentices are only entitled to the apprentice rate (£8.00) if they are under the age of 19, or aged 19 and over but currently in the first year of their apprenticeship. Apprentices who are aged 19 or over and have completed the first year of their current apprenticeship are legally entitled to be paid the full minimum wage rate for their age group (which could be up to £12.71 if they are 21+).
Avoid Mistakes When Applying the Rates
The National Minimum Wage and National Living Wage are more than just hourly rates, they are complex calculations. Without realising it, many employers underpay workers because they make mistakes when working out the rates.
Compliance is not always as simple as matching a number on a payslip. Common, unintended errors that frequently catch businesses out include:
- Making Illegal Deductions: Taking deductions from a worker’s salary for things like uniforms, tools, or specific corporate schemes that inadvertently drag their net pay below the legal hourly minimum.
- Unpaid Working Time: Not paying for all actual working hours. This includes mandatory tasks like time spent opening or closing a shop, security checks, travelling between work assignments, or attending required training sessions.
- Salaried Work (Excess Hours): Failing to track the hours worked by salaried staff. If salaried employees regularly work overtime or beyond their contracted hours, their total pay divided by their actual hours worked may slip below the required minimum wage threshold.
- Salary Sacrifice Schemes: Operating a salary sacrifice arrangement (such as a pension contribution or cycle-to-work scheme) that reduces an employee’s gross pay below the statutory minimum wage.
Stay Up to Date
To make sure you avoid compliance pitfalls and fully understand your duties, you should always review official guidelines. Read about the new National Minimum Wage and National Living Wage rates in full depth by visiting the official government resource: GOV.UK National Minimum Wage Rates
Struggling to keep up with changing payroll legislation? At Hewitts Payroll, we manage complex minimum wage calculations, tracking, and compliance seamlessly on your behalf. Get in touch with our specialist team today to secure your payroll process.
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