UK minimum wage

Which minimum wage rate applies

The National Minimum Wage sets the legal pay floor for eligible workers above school-leaving age. The applicable rate depends on the person's age and whether they are an apprentice. The National Living Wage is the statutory rate for the oldest age band. It is different from the voluntary Real Living Wage set by the Living Wage Foundation.

The statutory rates change on 1 April each year. A birthday or the end of the first year of an apprenticeship can also move someone into a different band. The higher rate applies from the first pay reference period starting on or after the change, rather than from an arbitrary payroll date.

Pay is more than the headline rate

Minimum wage compliance is tested using eligible pay and working time in each pay reference period. Unpaid working time, salary sacrifice or certain deductions and expenses can create an underpayment even when the contracted hourly rate looks high enough.

For example, time spent completing required checks, opening a shop before a shift or travelling between work assignments may count as working time. Not every payment counts as minimum-wage pay, and the accommodation offset has its own rules.

Keep the evidence behind the calculation

Keep accurate records of pay, working time and the facts that determine the person's rate. Diary birthdays, apprenticeship milestones and the annual April change. If accommodation, uniforms, tools or other deductions are involved, check the specific current rule instead of assuming every payment or benefit counts.

Payroll can run the calculation, but the employer still needs reliable records of the hours and deductions that sit behind it.