National Minimum Wage Rates from April 2027 - Employer Guide

The National Living Wage for workers aged 21 and over rises from £12.71 to £13.21 an hour on 1 April 2027, an increase of 3.9 per cent. The government confirmed the new rates on 28 October 2026, accepting the recommendations of the Low Pay Commission in full.

For a full-time worker on 37.5 hours a week, the new rate is worth £25,759.50 a year, £975 more than today. Every band below it rises too, along with the accommodation offset.

This guide sets out the new rates, when they apply in payroll, and the pay arrangements that most often push workers below the minimum without anyone noticing.

The New Rates from 1 April 2027

Rate	April 2026	April 2027	Increase
National Living Wage (21 and over)	£12.71	£13.21	3.9%
18 to 20 year old rate	£10.85	£11.27	3.9%
Under 18 rate	£8.00	£8.31	3.9%
Apprentice rate	£8.00	£8.31	3.9%
Accommodation offset (per day)	£11.10	£11.53	3.9%

The apprentice rate applies to apprentices aged under 19, and to apprentices aged 19 or over in the first year of their apprenticeship. Anyone else on an apprenticeship is entitled to the rate for their age. The current and past rates are on the GOV.UK minimum wage rates page.

What Changes for 18 to 20 Year Olds

The 18 to 20 rate rises by the same 3.9 per cent, to £11.27. The Low Pay Commission recommended pausing the move towards a single adult rate this year because demand for young workers is slowing, though it said there is still scope to lower the National Living Wage age, especially for 20 year olds.

The government's 2026 remit to the Low Pay Commission restated its aim of removing the separate adult age bands and bringing the 18 to 20 rate up to the National Living Wage. It left the Commission to decide the pace, with priority on young people's job prospects, so further steps are likely in later years.

When the New Rates Apply in Payroll

The new rates apply from the start of the first pay reference period that begins on or after 1 April 2027. A pay reference period is the period a worker is paid for, such as a week or a month, and it can never be longer than a month.

A monthly payroll running from 15 March to 14 April does not need the new rate until the period starting 15 April. A weekly payroll will usually pick it up in the first week of April.

The worker's age band is fixed by their age at the start of the pay reference period. A worker who turns 21 partway through a month moves to the National Living Wage from the next period, not from their birthday.

Pay Arrangements That Push Workers Below the Minimum

Most underpayments are not deliberate. They come from arrangements that look reasonable but reduce the pay that counts for minimum wage purposes. The closer a worker's hourly rate is to the minimum, the more likely one of these will tip them under it.

Salary sacrifice

Pay given up under a salary sacrifice scheme, for pensions, cycle to work or childcare, is not counted as pay for minimum wage purposes. A worker paid exactly the minimum who joins a salary sacrifice pension is underpaid from the first deduction.

Check sacrifice arrangements for every worker within a few per cent of the new rate before April, and stop or restructure any that would take them below it.

Deductions and payments for work items

Deductions from pay, or payments the worker makes to you, for items connected with the job reduce minimum wage pay. Uniforms, tools, personal protective equipment and required training costs all count, even when the worker has agreed to pay them in writing.

Accommodation charges

Where you provide accommodation, only the accommodation offset can count towards minimum wage pay. Charging more than the offset of £11.53 a day, £80.71 a week, reduces the worker's pay for minimum wage purposes by the difference.

Unpaid working time

Time spent working must be paid at the minimum rate, including time employers often leave out of timesheets. Common examples are compulsory training, pre-shift briefings, security checks, waiting for work to be allocated and travel between assignments during the working day.

Ordinary commuting between home and a fixed workplace does not count. For staff who travel between clients or sites, the travel in between does.

Tips and service charges

Tips, gratuities and service charges cannot be used to make up minimum wage pay. Under the Employment (Allocation of Tips) Act 2023 they must also be passed to workers in full and shared fairly.

Salaried staff working long hours

Salaried workers are covered too. Divide the pay for each pay reference period by the hours actually worked, and a salary that looked comfortable in March can fall below £13.21 an hour in a busy month.

How the Fair Work Agency Enforces the Minimum Wage

Since 7 April 2026 the minimum wage has been enforced by the Fair Work Agency, with HMRC officers carrying out investigations on its behalf. Where they find underpayment, they issue a Notice of Underpayment requiring the arrears to be paid to workers and a penalty to be paid to the government.

The rules are set out in the Fair Work Agency enforcement policy statement:

• Penalty: 200 per cent of the total underpayment, with a minimum of £100 and a maximum of £20,000 per worker.
• Prompt payment: the penalty is halved if all the arrears and half the penalty are paid within 14 days.
• Arrears at today's rate: past underpayments are recalculated at the rate in force when the arrears are calculated, so an April 2026 shortfall found in 2027 is repaid at the 2027 rate.
• Public naming: employers owing £500 or more are considered for naming, falling to more than £100 where the employer has had another notice in the previous six years.

Deliberate refusal to pay the minimum wage, and failing to keep or falsifying pay records, are also criminal offences.

What Employers Should Do Before April 2027

• List every worker paid within 50p an hour of their new band rate and check them against it.
• Update payroll rates for each band, timed to the first pay reference period starting on or after 1 April 2027.
• Review salary sacrifice, uniform, equipment and accommodation charges for staff near the minimum.
• Check salaried staff's hours in your busiest periods against the new rate.
• Diary age-band moves for workers turning 18 or 21 and apprentices reaching the end of their first year.
• Keep pay and hours records that show the calculation, and keep them for at least six years.

Rate rises also squeeze pay differentials for supervisors and long-serving staff just above the minimum, so budget for knock-on increases as well as the statutory ones.

Our guides to holiday pay enforcement and the documents you need for your first employee cover the related pay obligations the Fair Work Agency checks.

For the other employer measures announced alongside the new rates, see our round-up of Budget 2026 changes for employers.

Pay and Reward Policy Writers

Policy Pros writes the documents that keep pay compliant: pay and reward policies, salary sacrifice and deductions procedures, timekeeping and working time rules, and the holidays and pay policies that sit alongside them. Our HR policy writing service can update the whole set for April 2027 in one go.

If your pay rules have not been reviewed since the last rate rise, contact us for a free quote, or call 020 3951 2875.