From 1 April 2026, the National Living Wage is £12.71 per hour for workers aged 21 and over — set by the National Minimum Wage (Amendment) Regulations 2026. Employers must pay at least the rate appropriate to each worker's age, ensure that only qualifying payments are used in the NMW compliance calculation, and keep records for at least three years under the NMW Act 1998. Enforcement from 7 April 2026 sits with the new Fair Work Agency. Updated June 2026.
Source: National Minimum Wage Act 1998; National Minimum Wage (Amendment) Regulations 2026; acas.org.uk/national-minimum-wage.
What the law requires
The National Minimum Wage Act 1998 requires every employer to pay at least the minimum wage applicable to each worker's age band. It applies to:
- Employees on any type of contract (full-time, part-time, fixed-term, casual).
- Workers — including agency workers, home workers, and most freelancers who are not genuinely self-employed.
- Apprentices (at the apprentice rate if under 19 or in their first year).
The NMW does not apply to the genuinely self-employed, volunteers, or some limited categories such as family members living in the family home who participate in a family business. Source: NMW Act 1998, s.1; gov.uk/national-minimum-wage-rates.
The April 2026 rate table
| Worker category | Rate from 1 April 2026 |
|---|---|
| National Living Wage (aged 21 and over) | £12.71/hr |
| Aged 18–20 | £10.85/hr |
| Under 18 (not an apprentice) | £8.00/hr |
| Apprentice | £8.00/hr |
All rates effective from 1 April 2026. Source: National Minimum Wage (Amendment) Regulations 2026; gov.uk/national-minimum-wage-rates.
How to conduct a payroll compliance audit
Step 1 — Identify each worker's applicable rate
For each worker, confirm: their age (to identify the correct rate band); whether they are an apprentice; and whether they are genuinely employed or self-employed.
Step 2 — Calculate the effective hourly rate
For each worker, calculate the effective hourly rate for the pay reference period (usually a week or month):
- Hourly paid workers: Gross pay ÷ hours worked.
- Salaried workers: Annual salary ÷ (contracted weekly hours × 52). If the worker regularly works beyond contracted hours, use actual hours worked.
- Piece workers and output workers: Total qualifying pay ÷ hours worked (or use the fair piece rate method if applicable).
Step 3 — Check qualifying pay
Deduct from gross pay any amounts that do not count towards NMW (see FAQ below). The adjusted figure divided by hours worked is the effective NMW rate.
Step 4 — Compare to applicable rate
If the effective hourly rate is below the applicable rate for that worker's age band, there is a breach. Calculate the underpayment and correct it immediately.
Source: acas.org.uk/national-minimum-wage.
What counts towards NMW — and what does not
Counts towards NMW:
- Basic wages and salary.
- Productivity bonuses and performance-related pay paid in the pay reference period.
- Employer-provided accommodation — up to the accommodation offset rate (£11.10 per day from 1 April 2026 under the National Minimum Wage (Amendment) Regulations 2026; gov.uk/national-minimum-wage-rates).
Does not count towards NMW:
- Tips and service charges paid by customers (from 1 October 2024 under the Employment (Allocation of Tips) Act 2023).
- Expense reimbursements and allowances.
- Employer pension contributions.
- Loans and advances.
- Premium pay for overtime or unsocial hours — only the basic element at the standard rate counts; the premium element does not.
- Benefits in kind (other than accommodation).
Source: NMW Act 1998, s.1; acas.org.uk/national-minimum-wage.
Record-keeping obligations
Under the National Minimum Wage Act 1998, ss.9–10, employers must maintain records that are sufficient to establish that they have paid the NMW to all workers. Minimum retention period: three years from the end of the pay reference period to which they relate.
From 6 April 2026, working time and holiday pay records must be retained for six years under the Employment Rights Act 2025 (amending the Working Time Regulations 1998).
Workers have a statutory right to request access to NMW records (form NMW1). The employer must produce them within 14 days of a written request. Source: NMW Act 1998, ss.9–11.
Fair Work Agency enforcement from April 2026
The Fair Work Agency was established on 7 April 2026 under the Employment Rights Act 2025. It consolidated enforcement powers previously held by HMRC's National Minimum Wage unit, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate.
Enforcement powers include:
- Requiring employers to pay arrears of NMW to workers.
- Issuing penalty notices of up to 200% of the underpaid amount, capped at £20,000 per worker.
- Publicly naming employers on the government's NMW enforcement list.
- Bringing employment tribunal claims on behalf of workers.
- Referring cases for criminal prosecution.
Workers can also bring individual tribunal claims for unlawful deduction from wages under Employment Rights Act 1996, s.13. Source: NMW Act 1998, ss.19–19H; ERA 2025.
NMW and underpaid workers: broader employment rights
Workers who have been underpaid may also have other employment rights affected. For example, underpayment of wages can affect whether a worker meets the lower earnings limit for statutory maternity pay (£129/week from 6 April 2026, the National Insurance lower earnings limit). Note: from 6 April 2026, statutory sick pay no longer has a lower earnings limit — all employees qualify for SSP regardless of earnings level. For the intersection of NMW compliance and redundancy rights, see also underpaid workers and redundancy rights.
Check compliance now
Use the free NMW compliance calculator to check whether a rate of pay meets the national minimum wage for any age band. Enter hourly rate, age, and weekly hours.
Frequently asked questions
See the FAQ below. For NMW compliance queries, see ACAS or the GOV.UK guidance at gov.uk/national-minimum-wage-rates.
Back to NMW compliance.