The Government has confirmed the next round of national minimum wage increases in the autumn budget this week. These changes will be coming into effect from the first full pay cycle after 1 April 2026. For HR and payroll teams, this is the moment to get ahead—before budgeting pressures, resourcing decisions, and compliance checks start competing for your attention.
While most organisations pay the correct rates with the best of intentions, HMRC investigations continue to show that a lot of employers accidentally fall foul of National Minimum Wage (NMW) rules. And in many cases, the issue isn’t the hourly rate at all—it’s the hidden traps in deductions, unpaid time, and salary sacrifice schemes.
The new national minimum wage increases for 2026
Before we get into the exciting world of employer compliance, let’s look at the new hourly rates announced by the Government.
To make things easier for you, we’ve expanded the data into a practical table showing the April 2026 increase, percentage change, and estimated monthly impact based on a 37.5-hour week.
| Category | Current hourly rate | New hourly rate (April 2026) | Increase (£) | Increase (%) | Approx. monthly impact* |
|---|---|---|---|---|---|
| Apprentices | £7.55 | £8.00 | + £0.45 | 6.0% | + £73.13 |
| Under 18 years of age | £7.55 | £8.00 | + £0.45 | 6.0% | + £73.13 |
| 18–20 years of age | £10.00 | £10.85 | + £0.85 | 8.5% | + £138.44 |
| 21 years + (National Living Wage) | £12.21 | £12.71 | + £0.50 | 4.1% | + £81.25 |
*Monthly impact calculated using:
37.5 hours/week × 52 weeks ÷ 12 months = 162.5 hours/month.
8 national minimum wage traps to watch out for
Most problems surrounding NMW happen outside the obvious pay rates. Here are the key areas to keep in mind so you can act proactively, rather than reactively.
1. Salary sacrifice
Salary sacrifice schemes—pensions, holiday purchase, EV leasing, and cycle-to-work schemes—can all reduce gross pay below the national minimum wage threshold if you don’t monitor it closely. And remember—employee consent does not override your statutory obligation to pay NMW. No-one can contract outside of the law.
Tip: Always check the post-sacrifice hourly pay in each pay period.
2. Repayment of company loans
You might offer fantastic support options to help support your people—training loans, season-ticket loans, hardship advances. But repayments deducted from gross pay affect NMW, pulling employees below the NMW threshold.
Tip: Where appropriate (making sure you have employee consent), use net-pay standing orders instead of payroll deductions.
3. Unpaid working hours
This is one of the biggest blind spots, especially for regulated industries. But, what counts as working time?
The list is much longer than many organisations realise, including:
- mandatory training
- pre-shift briefings or handovers
- security checks
- opening/closing routines
If it’s required and it benefits the organisation, it’s almost certainly working time in the eyes of HMRC.
Tip: Consider what you are asking of your teams—if it’s required and benefits the organisation, it likely needs to be paid.
4. Uniforms and equipment
If employees buy their own uniforms or tools and they aren’t fully reimbursed, the cost can push their pay below NMW in that pay period.
Tip: Either provide essential items to your people free of charge or fully reimburse them.
5. Variable hours
NMW is calculated every pay reference period—you can’t average across the year. Even one low-hours period is a breach. This includes absences for sickness, cancelled shifts, reduced hours because of industrial action, and fluctuating seasonal hours.
Tips, service charges, and overtime don’t count toward NMW calculations.
6. Commission-only roles
Commission-heavy roles often slip through compliance checks. Employees must still meet NMW thresholds over each pay reference period. If their commission doesn’t meet the required amount, you will need to top up the difference.
7. Employer-provided accommodation
Accommodation offset rules allow employers to reduce the effective hourly rate, but only up to a strict maximum.
This works well for sectors like agriculture and hospitality, but you need to:
- check the current accommodation offset rate
- calculate it every pay period
- avoid rolling forward assumptions month to month
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A quick HR checklist
To make navigating the national minimum wage increases easier, here’s a checklist of what you can review now ahead of 2026:
- Identify anyone earning close to the new April 2026 rates
- Review salary sacrifice arrangements and deductions
- Check for unpaid working time (briefings, checks, training)
- Reassess uniform/equipment reimbursement rules
- Speak with payroll to test different pay-period scenarios
- Document clearer guidance for managers
- Forecast the financial uplift using the table above
Most issues become visible—and fixable—once you take a closer look at these areas, minimising the risk of non-compliance sneaking up on you later.
Get ready for national minimum wage increases
NMW compliance doesn’t have to be stressful. With the right checks (and the right HR and payroll system), it becomes consistent, predictable, and far less time consuming. With Cintra, we make sure you’re always compliant; our payroll software is loaded with rates and updated as standard while our HR professionals make sure you can manage any changes that come your way.
Want to see how Cintra Payroll helps organisations calculate National Minimum Wage accurately—even with variable hours, deductions, or salary sacrifice? Book a demo to see our software in practice.
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