Your people deserve to recieve the correct pay for their hard work. It’s as simple as that, and something the government has backed up with another round of minimum wage increases for 2026/27. The new rates came into force on 1 April 2026, so if you haven’t already updated your payroll, now’s the time.
Whether you run payroll in-house or rely on an outsourced service, this piece covers everything you need, from the confirmed rates to what’s changed from last year.
What’s changed from 2025/26?
This year’s NLW rise of 4.1% is more modest than the 6.7% increase in 2025/26—but it still outpaces inflation forecasts, so it’s a real-terms pay increase for those on the minimum wage.
The biggest jump is in the 18–20 band (8.5%), which reflects the government’s longer-term push towards a single adult wage rate. The 16–17 and apprentice rates have also moved up from £7.55 to £8.00.
One broader change worth noting: the government is launching the Fair Work Agency (FWA) in April 2026 to oversee enforcement of NMW, Statutory Sick Pay (SSP), and holiday pay. Enforcement activity is only going to increase from here—so it’s a good time to make sure your processes are solid.
National Minimum Wage for 2026/27
The new NMW (National Minimum Wage) and NLW (National Living Wage) rates apply from 1 April 2026. Here’s the full picture, including how each rate compares to 2025/26 and the approximate monthly impact for a 37.5-hour week.
| NMW Rate | Increase (£) | Percentage increase | |
|---|---|---|---|
| National Living Wage (21 and over) | £12.71 | £0.50 | 4.1% |
| 18–20-year-old rate | £10.85 | £0.85 | 8.5% |
| 16–17-year-old rate | £8.00 | £0.45 | 6.0% |
| Apprentice Rate | £8.00 | £0.45 | 6% |
| Accommodation offset | £11.10 | £0.44 | 4.1% |
These rates were confirmed by the government following recommendations from the Low Pay Commission (LPC), the independent body that advises on minimum wage levels, and accepted in full by Chancellor Rachel Reeves as part of the Autumn Budget 2025.
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How many UK employees will this affect?
Around 2.7 million workers across the UK received a pay rise from 1 April 2026. The biggest percentage jumps are in the younger age bands—particularly the 8.5% rise for 18–20-year-olds. That’s good news for young workers, but it does mean employers in sectors like retail, hospitality, and leisure are managing a more significant cost increase than the headline NLW figure suggests.
It’s also worth keeping an eye on what’s coming. The LPC has signalled a path to extend the NLW to 20-year-olds from 2027, with a further possible reduction to 18 in 2028 or 2029 (subject to economic conditions). Yhe gap between the age bands is narrowing, so your pay structures may need to adapt accordingly over the next few years.
Looking ahead: what might change in 2027?
The LPC’s central estimate for the 2027 NLW sits in the range of £13.02–£13.34 (with a central estimate of £13.18), based on current projections of two-thirds of median earnings. These are indicative figures—not confirmed rates—but they give a useful insight for planning.
The bigger structural change coming is the likely extension of the NLW to 20-year-olds from April 2027. That would mean the 18–20 band disappears, with those workers moving onto whatever the NLW rate is at that point. If you employ a significant number of 18–20-year-olds, that’s a material change to plan for—and the time to start is now.
For a deeper look at how UK payroll legislation is changing in 2026/27, our payroll legislation hub covers all the key updates in one place, including changes to National Insurance, pension contributions, and statutory payments.
What some employers don’t know or understand about NMW in 2026/7
Most NMW problems don’t come from employers deliberately paying the wrong rate. They come from payroll processes that don’t account for all the rules. HMRC identified £5.8 million in arrears for over 25,000 workers in 2024/25—and the two most common causes were deductions and unpaid working time.
Here are the main things to watch out for.
- Salary sacrifice arrangements: Pensions, cycle-to-work, EV leasing, holiday purchase—all reduce gross pay. If post-sacrifice pay drops below the NMW threshold in any pay period, you’re in breach. Employee consent doesn’t change that. Always check the post-sacrifice hourly rate each pay period, not just on setup.
- Unpaid working time: Working time is broader than most organisations realise. Mandatory training, pre-shift briefings, security checks, opening and closing routines, and standby time all count. If it’s required and it benefits the organisation, it needs to be paid.
- Deductions from wages: Uniform costs, equipment, or loan repayments taken from gross pay all affect NMW calculations, even with employee sign-off. A single deduction in one pay period can cause a breach. Where possible, use net-pay arrangements rather than payroll deductions for loan repayments.
- Variable hours: NMW is calculated per pay reference period, not annually. You can’t average a shortfall against an overpayment in another period. Tips, service charges, and overtime don’t count towards NMW—so commission-heavy roles with a low month will need topping up.
- Apprentice age and year rules: The £8.00 rate only applies to apprentices under 19, or those aged 19+ still in their first apprenticeship year. Once they hit 19 and complete year one, they move to their age band rate. So, for example, a 21-year-old in that position should be on £12.71, not £8.00.
Are you looking for timely and accurate payroll that keeps you on top of minimum wage rates?
NMW compliance doesn’t have to be stressful. With the right checks in place—and payroll software that keeps pace with legislation—it becomes a routine part of running your organisation rather than something to worry about.
If you’d like to see how Cintra handles minimum wage calculations across variable hours, deductions, and salary sacrifice, you’re warmly invited to book a personalised demo. We’ll walk you through the software and show you exactly how it works for organisations like yours.
Payroll Legislation Guide
The facts, figures, thresholds and allowances for 2026/27 spanning tax, National Insurance, pensions, statutory payments and more.
