For someone working 37.5 hours a week, this means gross annual pay of £24,784.50.
The National Minimum Wage has also increased. For people aged 18 to 20, the rate has risen from £10.00 to £10.85. For under 18s and apprentices, the rate has risen from £7.55 to £8.00.
Why was the National Living Wage introduced?
The National Minimum Wage was introduced in 1999 following the National Minimum Wage Act 1998.
The National Living Wage was introduced in April 2016 to help low-paid workers cover their basic living costs.
Most workers in the UK are entitled to be paid at least the relevant minimum wage. If an employer underpays the National Minimum Wage by more than £500, they may be named on the Government naming list.
Salary sacrifice and the National Living Wage
The National Minimum Wage and National Living Wage are calculated after any salary sacrifice arrangements.
Any salary sacrifice arrangement must not reduce your pay below the National Minimum Wage or National Living Wage.
So, if you enter into your employer’s salary sacrifice pension scheme, your employer must still pay you enough to cover both your pension contributions and the applicable minimum wage rate.
If you receive tips through your employment, and they are not an obligatory service charge, these do not count towards your wages for National Living Wage or National Minimum Wage purposes.
Who is entitled to the National Minimum Wage or National Living Wage?
If you work in the UK and work or provide services under a contract, you will usually be entitled to the National Living Wage or National Minimum Wage.
There are exclusions. These include people who are self-employed, members of the armed forces and voluntary workers. Details of other exclusions can be found in the
GOV.UK guidance on who gets the minimum wage.
FAQs
What is the National Living Wage from April 2026?
From April 2026, the National Living Wage for people aged 21 and over is £12.71 an hour.
What is the National Minimum Wage for 18 to 20-year-olds?
From April 2026, the National Minimum Wage for people aged 18 to 20 is £10.85 an hour.
Do salary sacrifice pension contributions affect minimum wage calculations?
Yes. National Minimum Wage and National Living Wage calculations are based on pay after salary sacrifice. A salary sacrifice arrangement must not reduce pay below the applicable minimum wage rate.
Do tips count towards the National Minimum Wage?
Tips that are not an obligatory service charge do not count towards wages for National Minimum Wage or National Living Wage purposes.
