National Minimum Wage 2026: All Rates and Employer Obligations

Last updated: April 2026

Every UK employer must pay at least the national minimum wage. Get it wrong and you face backdated pay, financial penalties, public naming by HMRC, and in serious cases, criminal prosecution.

This guide covers every minimum wage tier for 2026, what counts as pay for compliance purposes, your record-keeping obligations, and exactly what happens when HMRC investigates. If you employ anyone on or close to minimum wage, from apprentices to experienced staff, this is your reference.

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National Minimum Wage Employer Guide 2026: Every Rate Explained

The national minimum wage (NMW) is the legal floor for hourly pay in the UK. It applies to almost all workers, not just employees, and different rates apply depending on age and employment status.

The highest band, for workers aged 21 and over, is called the National Living Wage (NLW). Other bands cover younger workers and apprentices. All rates are set by the government each April following recommendations from the Low Pay Commission.

Rates from 1 April 2026:

| Worker Category | Hourly Rate (from April 2026) | |---|---| | National Living Wage (aged 21 and over) | £12.21 | | 18 to 20 year olds | £10.00 | | Under 18 (above school leaving age) | £7.55 | | Apprentice rate | £7.55 |

These rates are the absolute legal minimum. You can pay above them, but never below.

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Who Qualifies for Each NMW Tier

Getting the tier wrong is one of the most common compliance failures. The rate a worker is entitled to depends on their age at the start of the pay reference period, not their age when they were hired.

National Living Wage (21 and over): £12.21 per hour

This applies to all workers aged 21 or over, regardless of job title, contract type, or hours. It covers full-time staff, part-time workers, zero-hours contract workers, agency workers, and casual staff.

The only exceptions are genuinely self-employed people (not workers misclassified as self-employed), volunteers, and certain other narrow categories.

18 to 20 Rate: £10.00 per hour

Workers aged 18, 19, or 20 are entitled to this rate. The moment a worker turns 21, they move to the NLW band. You need a system to catch these birthday transitions, because HMRC will check.

Under 18 Rate: £7.55 per hour

This covers workers above the school leaving age but under 18. In practice, this means 16 and 17 year olds who are working. School-age children under the minimum school leaving age have separate rules and are not covered by the NMW in the same way.

Apprentice Rate: £7.55 per hour

The apprentice rate applies to apprentices who are either under 19, or aged 19 and over but in the first year of their current apprenticeship.

This is where many employers trip up. Once an apprentice turns 19 and has completed their first year, they are entitled to the full NMW rate for their age. A 20-year-old apprentice in their second year must be paid at least £10.00 per hour, not £7.55. HMRC specifically targets this in compliance checks.

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What Counts as Pay for NMW Purposes

Not everything you pay a worker counts towards the minimum wage calculation. Understanding what HMRC includes and excludes is essential.

Payments that count

• Basic hourly pay, salary, or piece rate payments
• Performance bonuses and commission (in the pay reference period they are paid)
• Accommodation benefit (up to the accommodation offset limit)

Payments that do NOT count

• Tips, gratuities, and service charges (even if paid through payroll)
• Overtime premium (only the basic rate element counts)
• Shift premiums or unsocial hours payments above the basic rate
• Expenses or allowances for equipment, travel, or uniforms
• Pension contributions by the employer
• Benefits in kind (other than accommodation within the offset)

This distinction matters more than most employers realise. If you pay someone £12.21 per hour but £1.50 of that is a tip distributed through payroll, their NMW-qualifying pay is only £10.71. That is a breach.

The accommodation offset

If you provide accommodation to a worker, you can count a limited amount towards their NMW pay using the accommodation offset. If you charge for accommodation above the offset, the excess reduces the worker's effective hourly rate for NMW purposes. This catches out employers in hospitality, agriculture, and care sectors regularly.

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Record-Keeping Obligations

You are legally required to keep records proving you are paying at least the NMW:

• Hours worked in each pay reference period
• Payments made in each pay reference period
• The worker's date of birth (to determine the correct rate)
• Any accommodation provided and charges made

You must keep these records for six years from the end of the pay reference period they relate to. Workers can request access to their NMW records, and you must provide copies within 14 days.

Failure to keep adequate records is a separate offence. Even if you are actually paying above the minimum wage, if you cannot prove it from your records, HMRC can treat it as non-compliance.

Salaried workers: the hourly rate trap

If you pay staff a salary rather than an hourly rate, you still need to check NMW compliance. Divide the gross salary in each pay reference period by the total hours worked.

A salary of £24,000 per year looks well above NMW. But if a worker contracted for 37.5 hours per week regularly works 50 hours, the effective hourly rate drops to around £9.23. That is a breach for any worker aged 18 or over. This is one of the most common ways salaried employers end up in trouble with HMRC.

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Common Underpayment Traps

HMRC investigations repeatedly find the same patterns. Most are not deliberate. They are system failures that go unnoticed.

Uniform and dress code costs. If workers must buy specific clothing and you do not reimburse, the unreimbursed amount counts as a deduction for NMW purposes. A worker earning exactly the NMW who spends £30 on required work shoes has been effectively underpaid.

Training time. Mandatory training counts as working time. Unpaid inductions, e-learning modules, and compliance training all count in the NMW calculation even if they happen off-site.

Travel between assignments. Workers who travel between work locations during the day (not commuting to and from home) must be paid for that time. Care workers visiting multiple clients and cleaners moving between sites are the most common examples.

Birthday transitions. When a worker moves into a higher NMW band (turning 18 or 21), the rate must increase from the start of the next pay reference period. If your payroll does not automatically flag these transitions, you will miss them.

Apprenticeship year-end transitions. When an apprentice completes their first year and is 19 or over, they move to the age-appropriate rate. You need to track apprenticeship start dates alongside dates of birth to get this right.

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HMRC Enforcement: Penalties and the Naming Scheme

HMRC enforces the NMW through its dedicated enforcement team. Investigations can be triggered by worker complaints, risk-based targeting, or intelligence from other government agencies.

How investigations work

HMRC officers have the power to require you to produce pay records, enter your business premises, and interview workers. You do not get to choose whether to cooperate. Obstructing an investigation is a criminal offence.

Financial penalties

If HMRC finds you have underpaid:

• Arrears: You must pay the full shortfall, calculated at the current NMW rate (not the rate when the underpayment happened). This means delays make the bill larger.
• Penalty: 200% of total arrears, up to £20,000 per worker. Halved to 100% if paid within 14 days.

For an employer who underpaid 10 workers by £500 each: £5,000 in arrears plus up to £100,000 in penalties. These numbers add up fast.

The naming and shaming scheme

HMRC publishes the names of employers who breach the NMW. The current threshold is an underpayment of at least £500 in total or affecting at least five workers. Named employers appear on a public government list, and the results are shared with national media.

Being named is reputationally devastating regardless of whether the breach was deliberate or accidental. High-profile retailers, restaurant chains, and care providers have all appeared on the list. The damage to employer brand and recruitment efforts is significant and lasting.

Criminal prosecution

In serious cases, particularly deliberate underpayment or falsified records, HMRC can refer cases for criminal prosecution. Offences include refusing to pay the NMW, failing to keep records, falsifying records, and obstructing enforcement officers. Conviction can result in fines and imprisonment, though prosecution remains less common than civil penalties.

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Employment Contracts and NMW

Your contracts should clearly state the pay rate, pay frequency, and normal working hours. If a contract states an hourly rate that has fallen below the NMW due to a rate increase, the legal minimum overrides the contract automatically. You do not need a new contract, but it is good practice to confirm the updated rate in writing.

For salaried workers, ensure the contract specifies normal weekly hours. Without a contractual hours figure, HMRC may use actual hours worked to calculate the effective hourly rate, which often produces a finding of underpayment if the worker regularly exceeds expected hours.

The Employment Rights Act 2025 strengthens protections for workers who raise NMW concerns. Dismissing a worker who has flagged underpayment could result in an automatic unfair dismissal claim from day one, with no qualifying period required.

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Check Your Compliance Now

Check your employment contracts and pay policies are up to date. The EmployerKit Audit reviews your documents against current requirements. From £49. Visit employerkit.com/tools/employerkit-audit.

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Frequently Asked Questions

Q: Do I have to pay the national minimum wage to all workers, or just employees?

A: Almost all workers are entitled to the NMW, not just employees. This includes casual workers, agency workers, zero-hours contract workers, and piece-rate workers. The main exceptions are genuinely self-employed people, volunteers, company directors, and members of the armed forces. If someone is a "worker" under employment law (they have a contract to perform work personally and are not running their own business), they are almost certainly entitled to the NMW.

Q: What happens if I accidentally underpay a worker below the minimum wage?

A: HMRC does not distinguish between accidental and deliberate underpayment when calculating penalties. You will owe full arrears (calculated at the current NMW rate, not the rate when the underpayment occurred) plus a penalty of up to 200% of arrears, capped at £20,000 per worker. If you discover a problem, pay the arrears immediately and consider notifying HMRC before they find it.

Q: Can I count tips towards the minimum wage?

A: No. Tips, gratuities, and service charges cannot count towards NMW pay, regardless of how they are distributed. Even if tips are paid through your payroll system, they must be treated as separate from NMW-qualifying pay. If a worker's base pay without tips falls below the NMW, you are in breach.

Q: How do I work out the correct rate for an apprentice who turns 19 during their apprenticeship?

A: An apprentice qualifies for the apprentice rate (£7.55) if they are either under 19 or in the first year of their apprenticeship. Once they have both turned 19 and completed their first year, they move to the age-appropriate NMW rate. A 19-year-old in their second year must get at least £10.00 (the 18 to 20 rate). Track both the apprenticeship start date and date of birth.

Q: Does the NMW apply to workers on zero-hours contracts?

A: Yes. Workers on zero-hours contracts are entitled to the NMW for every hour worked, based on their age band. Having no guaranteed hours does not reduce their entitlement. Every hour worked must be paid at or above the relevant NMW rate.