The National Minimum Wage (NMW) is the legal floor below which no employer in the UK may pay a worker. It was introduced in April 1999 under the National Minimum Wage Act 1998, and since 2016 older workers have been entitled to the higher National Living Wage — from April 2024, everyone aged 21 and over. Rates are recommended each year by the Low Pay Commission and change on 1 April.
Current National Minimum Wage Rates (2026)
From 1 April 2026, the National Living Wage for workers aged 21 and over is £12.71 per hour. Lower rates apply to younger workers and apprentices. Check GOV.UK for the current figures before running payroll.
Key figure: The National Living Wage is £12.71 per hour. On a 37.5-hour week that is roughly £2,065.38 per month (£12.71 × 37.5 hours × 52 weeks / 12 months).
| Category | Hourly rate | 37.5-hour week |
|---|---|---|
| National Living Wage (21 and over) | £12.71 | £476.63 |
| 18 to 20 | £10.85 | £406.88 |
| Under 18 | £8.00 | £300.00 |
| Apprentice | £8.00 | £300.00 |
Who Does the NMW Apply To?
The minimum wage applies to almost all workers over school leaving age, including:
- Full-time and part-time employees
- Casual, agency and zero-hours workers
- Domestic workers such as nannies and cleaners (other than those living as part of the family)
- Trainees, interns and workers on probation, if they are classed as workers
Genuinely self-employed people are not covered, but the label in the contract doesn't decide that — what matters is how the relationship works in practice.
Special Categories
Domestic Workers
Nannies, cleaners and carers employed directly by a household are entitled to the minimum wage like any other worker, unless they live in the family home and are treated as a member of the family. Employers of domestic staff must also run PAYE once earnings reach the Lower Earnings Limit — see our guide to paying a nanny or cleaner.
Farm Workers
Agricultural workers in England are covered by the standard minimum wage. Scotland and Wales have agricultural wages orders that can set higher minimum rates and extra entitlements.
Apprentices
The apprentice rate of £8.00 per hour applies to apprentices under 19, and to those aged 19 and over who are in the first year of their apprenticeship. After the first year, an apprentice aged 19 or over moves to the rate for their age band.
Who Isn't Entitled
- Genuinely self-employed people and company directors without an employment contract
- Volunteers and voluntary workers for charities
- Members of the armed forces
- Family members living in the employer's home and sharing tasks and activities
- Students on a work placement of up to one year that is part of a UK further or higher education course
How to Calculate Monthly Pay from the Hourly NMW
Many UK contracts state an annual salary or monthly pay rather than an hourly rate. To check it meets the minimum wage, work out the hourly equivalent for the pay reference period:
Monthly pay = hourly rate × weekly hours × 52 ÷ 12
| Weekly Hours | Hourly Rate | Monthly Equivalent |
|---|---|---|
| 40 hours | £12.71 | £2,203.07 |
| 37.5 hours | £12.71 | £2,065.38 |
| 30 hours | £12.71 | £1,652.30 |
| 25 hours | £12.71 | £1,376.92 |
| 20 hours | £12.71 | £1,101.53 |
Need to run these conversions quickly? Use our hourly rate converter to see how an hourly rate translates to weekly, monthly and annual figures.
Employer Obligations
1. Pay at Least the Right Rate for All Working Time
Average pay across the pay reference period (usually the pay period, up to a month) must be at least the minimum wage for every hour of working time — including time spent training, travelling between assignments and on call at the workplace. Piece-rate and commission workers must be topped up if their pay falls short.
2. Watch Deductions and Payments
Deductions or payments for things connected with the job — uniforms, tools, training — count against minimum wage pay and can push it below the legal rate. The only benefit in kind that can count towards the minimum wage is accommodation, up to the daily accommodation offset of £11.10.
3. Keep Accurate Records
Keep records showing you've paid at least the minimum wage — hours worked and pay — for 6 years. Workers can ask to see them and you must respond within 14 days.
4. Provide Itemised Payslips
Under section 8 of the Employment Rights Act 1996, every worker must get an itemised pay statement. If pay varies with the hours worked, it must show the hours. Use our free payslip generator to create compliant payslips in minutes.
Penalties for Non-Compliance
- Arrears — underpaid workers must be repaid at today's rates
- Penalty — up to 200% of the arrears (halved if paid within 14 days), capped at £20,000 per worker
- Naming — the government publishes the names of employers who underpay
- Prosecution — serious or repeated cases can lead to criminal prosecution
Warning: HMRC enforces the minimum wage and can inspect payroll records at any time, including in response to a worker's complaint to Acas or HMRC.
How the NMW Affects Payslips
Here is an example monthly payslip for a worker aged 21+ on the National Living Wage working 37.5 hours a week, on tax code 1257L and NI category A:
| Description | Amount |
|---|---|
| Gross pay (£12.71/hr × 37.5 hrs × 52 ÷ 12) | £2,065.38 |
| PAYE income tax | -£203.58 |
| Employee National Insurance (8%) | -£81.39 |
| Net pay (before pension) | £1,780.41 |
A full-time worker on the National Living Wage earns above the Personal Allowance and the National Insurance Primary Threshold, so both income tax and NI are usually due. Auto-enrolment pension contributions will normally apply too.
NMW and Overtime
There is no legal requirement to pay a higher rate for overtime, Sundays or bank holidays — but the worker's average pay across all hours in the pay reference period, including overtime, must still meet the minimum wage. Unpaid overtime can easily push a salaried worker below the legal rate.
Minimum Wage and Employer National Insurance
Paying at least the minimum wage does not change your National Insurance position, but two reliefs are worth knowing. The Employment Allowance takes up to £10,500 off your employer National Insurance bill, and employees under 21 or apprentices under 25 attract no employer National Insurance up to the Upper Secondary Threshold.
Common NMW Mistakes
- Not updating rates on 1 April — and not moving workers to the higher rate on their birthday
- Using the apprentice rate wrongly — only for apprentices under 19 or in their first year
- Ignoring unpaid working time — training, travel between jobs and unpaid overtime all count
- Deducting for uniforms or equipment in a way that takes pay below the minimum
- Treating salary as safe — salaried workers working long hours can fall below the hourly rate
- Confusing gross and net pay — the minimum wage applies to gross pay before deductions
Resources and Further Reading
- GOV.UK National Minimum Wage rates — the current and previous rates
- National Minimum Wage Act 1998 and the National Minimum Wage Regulations 2015 — the primary legislation
- PAYE Calculator — check the tax due on a minimum-wage salary
- Hourly Rate Converter — convert between hourly, weekly, monthly and annual pay
Staying compliant with the minimum wage is straightforward if you keep your payroll updated and issue proper payslips. Our free payslip generator handles the calculations — enter the pay, and it produces an itemised payslip with PAYE and National Insurance worked out for you.